Netflix, which generated up to 1 trillion won in revenue in South Korea with titles such as "Squid Game 2" and "Culinary Class Wars," reportedly paid corporate taxes of 5 billion won. Although there have been criticisms regarding the low amount of corporate tax compared to its revenue, Netflix stated, "We have complied faithfully."
According to the Financial Supervisory Service's electronic disclosure system on the 16th, Netflix's Korean corporation, Netflix Services Korea, recorded revenues of 899.7 billion won and operating profit of 17.4 billion won last year.
This is an increase of 76.3 billion won (9.27%) compared to the previous year. The operating profit also increased by 44% to 17.4 billion won, and when adding the revenue of 49.9 billion won from Netflix Entertainment Korea, the total revenue generated by Netflix in Korea exceeds 950 billion won.
Although it earned nearly 1 trillion won in revenue, the corporate taxes paid by the two corporations are reportedly 3.9 billion won and 1.3 billion won, respectively. The total tax of 5 billion won is considered low compared to the 1 trillion won in revenue.
Previously, Netflix Services Korea reported its cost of sales at 767.4 billion won, of which 732.4 billion won was specified as the "subscription membership purchase fee." This represents the amount paid to Netflix headquarters under the guise of content usage fees. In 2023, it remitted 9.5 billion won in retained earnings as dividends to the headquarters.
In response, the National Tax Service determined in 2021 that this constituted tax avoidance, imposing an additional tax of 78 billion won. Netflix filed a lawsuit, lost in the first trial, but is currently appealing.
Regarding the criticisms about revenue and corporate taxes, Netflix explained, "Corporate taxes are assessed based on pre-tax profits after deducting expenses related to revenue, not total revenue," adding, "Netflix faithfully pays all taxes imposed and is also making direct investments in Korean content, continuously expanding investments, and promoting co-growth with the entertainment industry."
Last year, Netflix achieved success through "Squid Game Season 2" and "Culinary Class Wars." This year, with "Squid Game Season 3" and "Culinary Class Wars Season 2" set to be released, and new hits like "When Life Gives You Tangerines," revenue is expected to rise further.
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