The government is moving to strengthen taxation of high-income influencers and content creators on social networking services, including YouTubers, to prevent tax evasion, according to documents submitted to lawmakers on Monday.
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(Yonhap) |
According to Rep. Kang Byung-won of the Democratic Party of Korea, the Finance Ministry has been collecting foreign exchange receipts exceeding $10,000 per person from the Bank of Korea, and using the data for tax reports and investigation of high-income influencers and YouTubers. The data was collected as part of a parliamentary audit of the Finance Ministry.
“Although collecting foreign exchange receipts does not apply to only YouTubers, the data has been used to verify sources of taxation of the influencers. The ministry will further thoroughly manage tax sources,” said Kim Young-no, chief of the Finance Ministry’s income tax system division.
Content creators have been accused of being in a tax blind spot despite the high income they generate from advertising, sponsorships and the sale of goods.
Local YouTubers’ advertising revenues are sent in foreign currency from Google’s Asia office in Singapore to Korea.
Influencers, such as YouTubers, belonging to multichannel networks, or MCNs, are taxed based on income data submitted by MCN providers. MCNs support broadcasting planning, production, transmission and promotions for YouTubers, and distribute revenue to them.
Rep. Kang Byung-won said, “It is still difficult to verify income sources for influencers who do not belong to MCNs or whose content accounts are located overseas. The government should find better ways to verify hidden income sources.”
Kim Hyun-joon, new chief of the National Tax Service, said in an inaugural address on July 2, “We will strengthen the collection of on-site information on YouTubers, who are in a new blind spot. … We will also closely look into individual online creators who sell products online.”
Separately, the Finance Ministry said corporate taxes on multinational tech companies -- called the Google tax -- are being promoted by the International Organization for Economic Cooperation and Development.
According to documents submitted by the Finance Ministry to Rep. Kwon Sung-dong of the Liberty Korea Party, the Organization for Economic Cooperation and Development is working on a BEPS project for a joint international response to tax avoidance by multinational corporations.
BEPS, or Base Erosion and Profit Shifting project, is an OECD and G-20 project to set up an international framework to combat tax avoidance by multinational enterprises using base erosion and profit-shifting tools.
The Finance Ministry said the government has been participating in the OECD BEPS project and implementing recommendations. “In the future, we plan to participate in international discussions and reflect system improvement,” the ministry said.
By Shin Ji-hye (
shinjh@heraldcorp.com)
