The Korea Herald


Apple makes job creation claims as ‘Google tax’ pressure mounts

By Song Su-hyun

Published : Aug. 19, 2019 - 20:13

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For the first time, Apple Korea revealed on Monday figures for its local employment in South Korea, amid increasing calls for multinational tech giants to disclose their profits and taxes for operations here.

According to the homepage of Apple Korea, the smartphone and mobile software developer claims to have directly and indirectly created over 325,000 jobs in Korea, including around 200,000 new positions in connection with the mobile-based App Store in 2008.

“Apple has been operating its business in the Korean market for over 20 years and takes pride in contributing to the economic growth of the country,” it stated on the website.

“In Korea, Apple raises more than 4.7 trillion won ($3.9 billion) in profit from the App Store and cooperates with over 200 companies across the country,” it said. However, it did not reveal how much tax it paid on that profit.

The American tech giant also officially revealed that the company started sourcing high-tech stainless materials from Korea’s biggest steelmaker Posco for its latest iPhone X. It is the first public announcement on a partnership with a Korean company.

“Apple and Posco began a journey together in 2016 and made best efforts to develop a new kind of stainless (steel),” the company said.

Netmarble, a Korean gaming publisher, is another partner of Apple on its App Store, according to Apple.

The Korean firm worked together with Apple to publish over 300 mobile games on the App Store. The company’s sales via mobile gaming surged from 5 percent in 2012 to 95 percent in 2018.

“Netmarble has created a new specialized team for App Store games and is currently developing games using artificial intelligence,” an engineer at Netmarble said through the Apple announcement.

The rare announcements come amid growing calls for international tech giants like Apple, Google, Facebook and Amazon to pay a fair portion of taxes in accordance with their sales and profits generated in Korea.

The Ministry of Science and ICT has embarked on a research to decide on a measure to levy a tax on internet video and streaming service YouTube, a Google subsidiary.

Discussing the taxation of YouTube could eventually lead to a new round of talks on introducing a proposed “Google tax” in Korea, which would cover the other global tech giants.

Google has been named as the target of tax authorities in many countries, as the internet giant is accused of utilizing legal loopholes to avoid taxes by reporting sales via regional headquarters that are located in countries with a lower corporate tax rates.

“The government once considered introducing a tax on those multinational IT companies several years ago, but decided to follow international moves,” said an official at the ICT Ministry. “Korea will look at an upcoming report by OECD on the issue and consider the taxation.”

The Organization for Economic Development and Cooperation is set to publish a final report on the need for a “Google tax” in 2020.

France started to levy a 2 percent tax on revenues of over-the-top streaming firms such as YouTube and Netflix in 2017.

By Song Su-hyun (