Category: Korea-Business

Netflix and Google to Pay Higher Corporate Taxes in South Korea

It looks like major tech companies like Netflix and Google will no longer be able to avoid paying taxes in South Korea and possibly other countries as well:

Jobseekers listen to a career planning instructor at a small job fair at Google Campus in Seoul, Aug. 10, 2017. Korea Times file

The Korean offices of Netflix and Google will have to pay higher corporate taxes, upon the agreement of over 130 participants in the OECD blueprints drawn up to tackle global tax challenges.

Apart from the two firms, global IT giants including Amazon, Facebook and Apple will be subject to the so-called “Google tax,” whereby large digital companies will have to pay a certain amount of corporate tax, the rate of which is yet to be determined. 

“The government will have the grounds to tax them, if the agreement is reached. Nothing has been finalized yet,” a finance ministry official said, Tuesday. 

This is part of the global wave of efforts to tax the lucrative firms based on where their revenues are generated, not where their regional headquarters are located. Many global tech heavyweights have long managed to pay only a fraction of their profits as taxes here, largely by routing them to lower rate tax jurisdictions where their headquarters are based. 

Korea Times

You can read more at the link.

Korean Companies to Announce Major Investments in U.S. in Conjunction with President Moon’s Visit

The real story is not being reported is what President Moon wants from the Biden administration in return for these investments. My guess will be he wants the U.S. to be more flexible on sanctions to jump start his North Korea engagement policy:

This file photo provided by Samsung Electronics Co. on March 30, 2021, shows the company’s chip plant in Austin, Texas. (Yonhap)

The United States is the world’s leading technology and innovation hub, but it is not a leader in the high-tech supply chain, mostly relying on Asian countries for essential items, such as semiconductors and batteries for electric vehicles. 

In the face of growing challenges from China, U.S. President Joe Biden wants to revitalize the domestic manufacturing capacity amid the global chip crisis and a looming shortage of batteries, and he is expected to welcome a series of announcements of massive investment plans by Korean companies ahead of and after his summit talks with South Korean President Moon Jae-in on Friday.

Yonhap

You can read more at the link.

Samsung’s Heir Have to Pay an Approximately $12 Billion Dollar Tax

Could you imagine having to pay this much in taxes:

This composite image by Yonhap News TV shows the heirs of Samsung Group. From left are Samsung Electronics Vice Chairman Lee Jae-yong, Hotel Shilla CEO Lee Boo-jin and Samsung Welfare Foundation chief Lee Seo-hyun. (Yonhap)

The scions of Samsung Group, South Korea’s top conglomerate, are likely to unveil a plan this week on how to finance their massive inheritance tax, which includes the donation of late group chief Lee Kun-hee’s art collections.

The senior Lee, who was South Korea’s richest man, left more than 22 trillion won ($19.6 billion) worth of assets, including stocks valued around 19 trillion won.

Lee, who died in October last year at age 78, was survived by his wife, Hong Ra-hee, only son, Jae-yong, and two daughters — Boo-jin and Seo-hyun.

Lee’s family members are expected to pay around 12 trillion won in inheritance taxes for the late chief’s assets. 

They have to report and pay inheritance taxes to local authorities by the end of this month.

Korea Herald

You can read more at the link, but you know a tax bill is high when Samsung heirs are even having trouble trying to pay it.

Korean-American Immigrant Lost $20 Billion in Two Days

Bloomberg has a long, in-depth read on how a Korean-American immigrant turned billionaire, lost $20 billion dollars in just two days last month:

Bill Hwang

Before he lost it all—all $20 billion—Bill Hwang was the greatest trader you’d never heard of.

Starting in 2013, he parlayed more than $200 million left over from his shuttered hedge fund into a mind-boggling fortune by betting on stocks. Had he folded his hand in early March and cashed in, Hwang, 57, would have stood out among the world’s billionaires. There are richer men and women, of course, but their money is mostly tied up in businesses, real estate, complex investments, sports teams, and artwork. Hwang’s $20 billion net worth was almost as liquid as a government stimulus check. And then, in two short days, it was gone.

Bloomberg

You can read more at the link, but Hwang was also a large donor to the human rights group Liberty in North Korea (LiNK):

Hwang is closely involved with a group called Liberty in North Korea, or Link, that has helped about 1,300 North Koreans escaping the regime. “He doesn’t use God as a cover,” says Jensen Ko, a colleague at Archegos. “He lives that out.”

LG Electronics to No Longer Make Mobile Phones

There is now one less major mobile phone manufacturer:

In this advertisement photo from Dec. 13, 2005, a model shows LG Electronics’ “chocolate phone,” which had become a major hit. Yonhap

LG Electronics said Monday it will withdraw from the mobile business after years of money-losing performance amid intensifying competition with bigger rivals. 

The South Korean tech powerhouse said in a regulatory filing that its mobile communications (MC) unit will no longer produce and sell handsets after July 31, citing its long slump and fierce competition in the industry. 

Korea Times

You can read more at the link, but according to the article LG Electronics has accumulated $4.4 billion in debt from the lack of mobile phone sales.

Korean-American Beauty Shop Owner Attacked in Texas

Notice how the media has been making headlines out of every attack on Asian-Americans now?:

A beauty store owner was attacked inside her own store by two women in Harris County, Texas on March 17.Jung Kim, who is of Korean descent, asked the five women who knocked over the store’s wig displays to leave the premises. However, two of them doubled back and caused further destruction.Surveillance footage caught the moment one of the women attacked the 59-year-old, punching her at least eight times while shouting racial insults.

Yahoo News

Random crimes like this against Korean American business owners have been going on for a long time. Remember the LA Riots that targeted Koreatown, the Baltimore riots and Ferguson riots against Korean businesses, or the Korean-American gas station owner in Dallas who was called racist for defending his store from a criminal. Plus many Korean-American businesses were looted and destroyed during the Black Life Matters riots last summer. Where was the media defending Asian-Americans then?

Also notice how the criminals that attacked Ms. Kim in the above incident were black, but the headlines make no mention of that. Even the article makes no mention of their race, yet if a couple of white women committed this crime it is likely the headlines would talk about “white Kareans attack store owner”.

Tiger Woods Crash Calls Attention to Hyundai’s Luxury Genesis Brand

When I first heard that Tiger Woods was driving a Genesis branded SUV during his crash I have to admit I was a bit surprised he was driving one:

Are Genesis cars and SUVs safe?

After Tiger Woods crashed a Genesis GV80 SUV in the Los Angeles areaTuesday, causing devastating leg injuries, the safety of the little-known luxury brand made by Korean automaker Hyundai was thrust into the spotlight.

On social media, some people speculated that the SUV’s safety features may have saved the golf legend’s life, given that authorities said he was traveling at a high speed. Others questioned whether the vehicle should have done a better job of protecting Woods.

Independent assessments of Genesis vehicles have given them high marks for safety.

USA Today

You can read more at the link.

Hyundai Announces Battery Replacement for Its Electric Vehicles Due to Fire Danger

Not a good look for Hyundai’s EV program:

Hyundai Motor’s Kona EV catches fire while charging its battery at a charging station in Namyangju, about 20 kilometers east of Seoul, on Oct. 17, 2020, in this photo provided by the Namyangju City Fire Station. 

Hyundai Motor Co. said Wednesday it will replace batteries in some 82,000 Kona EV and two other electric vehicles sold globally due to potential fire risks, which could cost about 1 trillion won (US$899.7 million). 

Hyundai will begin the replacement of the battery management system (BMS) in 75,680 Kona EVs, 5,716 IONIQ EV and 305 Elec City buses from March 29 in the domestic market and from April in overseas markets, the company said in a statement.

Yonhap

You can read more at the link.

Korean Air Offers Flights to Nowhere to Draw Passengers

Sitting on an airplane for over two hours to nowhere in particular during a pandemic is not high on my list of things to do. Apparently there are enough people willing to do these flights to make it profitable:

Korean Air Lines Co., South Korea’s biggest carrier, has joined other airlines to offer “flights to nowhere” as a way to ride out the coronavirus crisis, the transport ministry said Sunday. 

Korean Air plans to use the A380 passenger jet on the route from Incheon to the East Sea, Busan, Jeju Island, the Straits of Korea and back to Incheon on Feb. 27, a ministry official said. 

The entertainment-packed flight to nowhere will take two hours and 20 minutes. It is priced at 219,000 won-700,000 won (US$200-$630) depending on cabin classes, he said. 

The company has yet to decide whether to continue to sell the flights to nowhere in March. 

Local airlines such as Asiana Airlines Inc. and Jeju Air Co. began selling such flights late last year. Asiana still offers the product, but Jeju Air’s is no longer in service.

Yonhap

You can read more at the link.

Hyundai Says They Are Not In Talks With Apple to Develop Autonomous Vehicle

Now Hyundai is saying they are not discussing a partnership with Apple:

Hyundai Motor Co. and affiliate Kia Corp. said Monday they are not in talks with Apple Inc. over an electric car manufacturing project in response to reports of their suspended discussions.

In separate regulatory filings, Hyundai and Kia, which together form the world’s fifth-biggest carmaker by sales, said they are “not in talks with Apple over developing an autonomous vehicle.” 

The carmakers said they are considering forming a partnership with foreign companies in regard to self-driving electric vehicles but no decision has been made yet.

Yonhap

You can read more at the link.