Coupang’s headquarters in Seoul, Thursday. (Yonhap)
Coupang’s headquarters in Seoul, Thursday. (Yonhap)

The South Korean unit of online retailer Coupang transferred more than 900 billion won ($620 million) in expenses to its headquarters in the United States in 2024, according to an industry report analyzed by Yonhap News Agency on Sunday.

The value of Coupang's so-called related-party expenses sent to its head office or other companies based in the US totaled 939 billion won in 2024, according to the company's audit report.

The report also showed that expenses transferred to the US, including service fees and royalties, amounted to more than 2.5 trillion won from 2020 to 2024.

However, the audit report provides only broad expense categories, making it difficult to determine whether the services or usage fees were calculated at fair market value.

Industry watchers have raised concerns that the structure may be designed to reduce profits at the South Korean entity while increasing assets at the US parent company.

Some have also questioned whether the lack of transparency in calculating the transferred funds could indicate attempts to minimize tax liabilities in both South Korea and the US.

"Dividends are clearly taxable, but service fees and royalties are areas where determining appropriateness is difficult, which is why tax avoidance controversies repeatedly arise," a tax expert who requested anonymity said. "Transparency is especially important when transactions involve a parent company."

South Korea's tax authorities have reportedly launched an in-depth investigation into Coupang, including transactions involving its US-based headquarters.

The company has come under heightened scrutiny following a data breach estimated by authorities to have affected nearly 33 million users. Coupang has said that data from only about 3,000 accounts was leaked, a figure disputed by regulators. (Yonhap)