Photo : YONHAP News
The National Tax Service(NTS) said it will review various taxation options on Google's commission fee revenue after the tech giant decided to take 30 percent fees of all mobile applications and content sales through its Google Play store next year.
In a written response to ruling Democratic Party lawmaker Kim Soo-hong, the NTS said it will consider a number of ways to impose taxes, even when there is no fixed physical place of business such as by taking into account the corporate activities of global firms' Korean domestic partners.
The tax service promised to closely monitor Google's app market transactions and sales.
Google Korea and other global IT companies claim they are not subject to Korean taxation because their servers are located overseas, but the NTS argues Google's Korean subsidiary is engaged in actual business in South Korea and should pay taxes.
In fact, the NTS ordered Google Korea to pay 600 billion won in corporate taxes early this year, arguing the firm has a “fixed place of business” in the country. Google did pay the tax, but also filed a complaint with the Tax Tribunal, which has yet to rule on the case.
During a parliamentary audit this month, NTS commissioner Kim Dae-ji said taxing Google's app market commission fees could be difficult due to the lack of a physical business site in Korea.