Google Korea also won the appeal in its corporate tax dispute worth 150 billion won against the tax authorities.
The Seoul High Court's Administrative Division 9-1 (Judges Hong Ji-young, Kim Dong-wan and Kim Hyeong-bae) on the 7th upheld the first trial in Google Korea's lawsuit seeking to cancel corporate tax and other collection measures against the head of the Seoul Yeoksam Tax Office and the head of the Seoul Gangnam District Office.
Earlier, the National Tax Service imposed 154 billion won in corporate tax and local income tax on Google Korea through a 2020 tax audit. Of the 1.5112 trillion won in advertising revenue Google Korea earned from September 2016 to December 2018, it remitted 975 billion won to the Asia-Pacific entity in Singapore (GAP), and the National Tax Service argued that this constituted "royalty income" subject to taxation in Korea.
However, Google argued that it was not subject to domestic taxation and filed an administrative suit, and the first trial also sided with Google. The first-trial panel found it difficult to view the amount Google Korea paid to GAP as royalty income in return for the use of computer programs or know-how.
The court also cited the fact that Google Korea did not own physical facilities for advertising services, such as data centers, as a reason it could not impose a corporate tax withholding obligation.