A Google product pop-up store in Seoul in February 2024 [Yonhap News]

Following Netflix and Meta, Google has also won its corporate tax lawsuit against tax authorities.

On the 7th, the 9-1 Administrative Division of the Seoul High Court (Presiding Judges Hong Ji-young, Kim Dong-wan, and Kim Hyung-bae) ruled in favor of Google Korea in part in a lawsuit seeking the cancellation of corporate tax and other collection notices filed by Google Korea against the head of the Yeoksam Tax Office and others.

The claim for the cancellation of local tax collection notices filed against the Gangnam District Office was dismissed. The court determined that there was no practical benefit to filing a lawsuit because local taxes are linked with corporate taxes.

Previously, tax authorities took issue with Google Korea remitting a portion of its income earned from domestic advertising sales to Google Asia Pacific, and in 2020, issued notices for corporate tax and local income tax collection against Google Korea. The amount was reportedly around 154 billion won.

Google Asia Pacific is a Singaporean entity that serves as the headquarters for the Asia-Pacific region.

Tax authorities viewed the remitted funds as royalty income for the use of copyrights and know-how, thus subject to taxation. However, Google Korea argued that it constituted business income of Google Asia Pacific and was therefore not subject to domestic taxation, initiating an administrative lawsuit.

The first-instance court ruled in favor of Google Korea, stating that it was difficult to consider the payments as compensation for knowledge and experience-related information or know-how. This judgment was upheld in the appellate court.

Previously, Netflix and Meta had also won their corporate tax cancellation lawsuits against domestic tax authorities.

Of the 76.2 billion won claimed by Netflix Korea, the cancellation of 68.7 billion won was accepted, and the tax amount sought for cancellation by Meta was reportedly around 200 billion won.