Apple Korea might have to pay up to $46 million (55 billion won) in taxes for pushing iPhone advertising costs to local mobile carriers. The Korean Times reports that Representative Jang Hye-young of the social democratic minor opposition Justice Party says that the Korea Fair Trade Commission has calculated that Apple Korea will be required to pay $30 million-$46 million (36.6 to 55 billion won) in corporate taxes.
Trouble for Apple in South Korea is just piling up. The country is going to pass a new law that will break Apple’s and Google’s dominance in the app market by prohibiting them from charging a commission for in-app purchases and will allow developers to offer alternative app distribution methods outside App Store and Play Store. The companies are asked to submit their compliance plans by mid-October.
Korea Fair Trade Commission accuses Apple Korea of imposing unfair practices against local mobile carriers
As per the report, a company has to record the funds received for advertisement under “gains from assets contributed” and pay corporate taxes on those gains. And Apple Korea made local carriers produce and pay for Phone and iPad advertising, and also pay repair costs of iPhones and iPads. Therefore, Apple Korea will have to pay a bigger amount than the given estimate, after the repair costs are added.
“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.”
“Apple Korea has been investigated by the Korea Fair Trade Commission for unfair practices against local mobile carriers, and 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,” Rep. Jang was cited as saying.
Earlier this year, Apple Korea agreed to invest $90 million in small businesses and consumers in South Korea to settle a 5 years-long antitrust case that accused the tech giant of abusing its powerful position in the respective marketplace.