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Oracle Charged $293M In South Korean Back Taxes (thestack.com)

Posted by EditorDavid on from the reversal-of-revenue dept.

An anonymous reader quotes The Stack: Multinational tech giant Oracle has been charged $293 million USD for corporate tax evasion in South Korea. The $293 million charge is made up of back taxes, as well as a punitive charge from the government tax agency. The company was originally notified of the tax debt in January of last year, when the National Tax Service charged Oracle with evasion of corporate tax payments on 2 trillion won in earnings from 2008-2014.

Oracle was accused of funneling revenues to Ireland to avoid paying taxes in South Korea. In an audit of the company's books, the tax authority found that Oracle had channeled profits generated in South Korea to an Irish subsidiary; however, it was found that those funds ultimately profited the company's headquarters in the United States. Because of this, the NTS determined that Oracle should have paid taxes on profits generated in South Korea to the South Korean government.

6 of 19 comments (clear)

  1. Good for them! by Notabadguy · · Score: 1

    Now enforce it and set an example.

    1. Re: Good for them! by Notabadguy · · Score: 4, Informative

      How? How can this be enforced?

      What if Oracle simply says, "we're not paying"? What can even be done? Sure, they may have to close their offices in and be banned from doing business in South Korea, but I doubt those offices and business profits them more than $293 million to make it worth it (maybe long term, but remember, businesses generally only think short term, to please their shareholders).

      Of course, the case will probably be appealed and held up in court for years, but thats irrelevant. I'm really curious how South Korea could enforce this, and not only because I hate Oracle and would love to see them pay up lol, but just for the sake of international business law.

      Are you serious?

      1. It was appealed and upheld.
      2. Oracle sued in South Korea's highest court and the verdict was upheld.
      3. There's no where else for them to appeal to.

      And if you think Oracle will close up shop in South Korea over $293m in back taxes, I don't think you understand how taxes work. That's a portion of their profit. Closing up shop in South Korea would remove that portion of their profit, the rest of their profit, and all the REVENUE from the South Korean market.

    2. Re: Good for them! by Anonymous Coward · · Score: 1

      Of course they profit more than that if that's how they generated the tax debt in the first place!

  2. Re: ok, that's some seriously funny math in S Kore by Entrope · · Score: 1

    You're off by about the orders of magnitude. The numbers I found say their GDP is 1.3-some trillion USD, or 1.5-some quadrillion won.

  3. Re:ok, that's some seriously funny math in S Korea by r1348 · · Score: 1

    Apparently, not the whole world uses dollars.

  4. This doesn't make any sense by bluefoxlucid · · Score: 1

    South Korea finds Oracle funneled revenues to Ireland, but those revenues actually should have gone to the United States HQ. South Korea thus decides Oracle owes SK taxes.

    ... if those revenues were not taxed because they were booked as taken in Ireland, and they're actually taken in the United States, doesn't that mean Oracle owes the United States money and owes South Korea nothing?

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