What you need to know
- Apple owes South Korea $46M, according to one lawmaker.
- Rep. Jang Hye-young says Apple owes the money in taxes.
- It stems from an antitrust dispute regarding who foots the bill for iPhone advertising.
A South Korean lawmaker says Apple owes the country some $46M in taxes it didn't pay because carriers footed the bill for advertising devices like the iPhone and iPad.
The Korea Times reports:
A lawmaker is claiming that U.S. tech giant Apple's local subsidiary should pay up to 55 billion won in corporate taxes from iPhone advertising costs it forced on local mobile carriers.According to Rep. Jang Hye-young of the social democratic minor opposition Justice Party, Tuesday, Apple is estimated to be required to pay 36.6 to 55 billion won in corporate taxes for advertising costs it made telecom service providers pay for. The figures were calculated by accounting experts based on data from the Korea Fair Trade Commission.
The calculations stem from an antitrust dispute in South Korea, pertaining to who pays for iPhone and iPad advertising costs in the country. The dispute itself has been settled, with Apple committing to spending $90 million investing in the country's infrastructure including research and development in the country's mobile phone and manufacturing sector, repairs and warranties, and digital education in schools.
However, industry estimates say that aside from the antitrust issues, Apple may also have avoided paying some additional taxes:
The industry estimates that the costs Apple Korea made local mobile carriers pay amount to 20 to 30 billion won, for which Apple needs to pay 28.8 billion to 43.2 billion won in corporate taxes. But the total amount of corporate taxes the company should pay comes to 36.6 billion to 55 billion won when including additional taxes that have been imposed for failing to report the corporate taxes that it is required to pay.
Rep. Jang said that the National Tax Service "needs to collect the corporate tax Apple Korea did not pay through inspections, amid these circumstances in which the company has made gains." They further stated that "taxes should be imposed on the company for gains made from passing promotional expenses onto partner firms via having abused its dominant status in business relations."
