[ K trendy NEWS Reporter Jun-sik Park ] While interest in Netflix's position on fair compensation for K-content is drawing attention, Netflix avoids the tax it has to pay in Korea by diverting most of its domestic sales overseas for the name of head office commission. turned out to be doing
It was argued that there should be a plan to prevent tax evasion by global big tech companies through system improvement.
출처 : K trendy NEWS(http://www.k-trendynews.com
On the 24th, at the comprehensive audit of the Ministry of Culture, Sports and Tourism by the Culture, Sports and Tourism Committee of the National Assembly, Executive Director Sophomore of Netflix Service Korea, a global content platform, attended as a witness.
On this day, the questions of lawmakers from the ruling and opposition parties were mainly focused on confirming Netflix's position on fair compensation for K content, which is generating remarkable profits in the global market.
First, Senator Kim Seung-soo asked, "In the Netflix earnings announcement, Korean content is making a great contribution to the success of Woo Young-woo and Suriname, but are they paying fair compensation for this?"
Jeong-moo said, "We are making efforts to provide fair and sufficient compensation to creators by signing various types of contracts," but declined to comment on specific compensation methods, saying that the contents of the contract could not be disclosed.
In the case of 'Squid Game', following 'Netflix's Top 10 TV Shows in the World' in September last year, it swept the top spot in 83 countries in 15 days, the opportunity for Netflix's corporate value to surge through K-content. prepared
At that time, Netflix stock reached a record high of $613.15 as of the closing price on October 1, last year, due to the success of "Squid Game", reaching a market cap of $271.3 billion (about 321 trillion won).
On this day, Rep. Kim said, "It is estimated that the squid game contributed 1 trillion won and Woo Young-woo contributed about 400 billion won. Did you compensate the producers in addition to the production cost? They said they gave incentives, but they gave them at a level that they couldn't even disclose. Even if they were satisfied at the time of the contract, isn't it common sense to reward them if they generate a huge profit that exceeds expectations?" he asked again.
Jeong-moo said, "We are working hard with the idea that we will give fair compensation. Please take into account that we are fully responsible for the risk of the box office and we will also bear the dubbing and marketing for worldwide distribution." We will try our best to find ways to contribute to the production environment.”
출처 : K trendy NEWS(http://www.k-trendynews.com)
According to the Netflix Korea audit report released by National Assembly Culture, Sports and Tourism Committee member Kim Seung-su (Member of the National Assembly, Daegu Buk-gu) on the 25th, Netflix paid 959.1 billion won, or 77.8% of its domestic sales of 1.233 trillion won over the past three years, as commissions for Netflix’s overseas headquarters. It was found that the company paid only 5.86 billion won in corporate tax, which is 0.5% of sales, by raising the cost of sales and significantly lowering the operating profit ratio.
According to Senator Kim Seung-soo's office, this behavior of Netflix is explained that it is avoiding paying domestic corporate tax by setting a high commission rate for remittance to overseas headquarters and lowering actual sales.
Rep. Kim said, “Netflix, a global OTT company, has continuously increased the cost of sales ratio in Korea, and paid about 82% of its sales in the name of commission as of last year and reduced its actual sales. If it is not relocated, the tax payable is estimated to exceed 50 billion won over three years,” he said, pointing out that the outflow of national wealth is serious.
The National Tax Service has collected about 80 billion won in tax since it started a tax investigation (tax violation investigation) from August 2020 to April 2021 on Netflix's tax evasion allegations. This is a measure against the illegal behavior of reducing taxes even after generating huge sales in Korea.
'Squid Game' achieved the #1 spot in 'Netflix's Top 10 TV Programs in the World' in September last year. In addition, if you look at the box office history of K-contents that recorded the top 10 worldwide, 'Kingdom Season 1 and 2 and Asinjeon' entered the 'Today's Top 10' in more than 15 countries right after the series was released, placing 2nd in the world in the Netflix movie category. 'Sweet Home' took third place with 22 million paid subscription households watching, and 'Seungriho' entered the 'Today's Top 10' in more than 80 countries, reaching 26 million paid subscription households worldwide in 28 days. watched
As such, Netflix is valuing K-contents as a key factor in increasing subscribers in Asia Pacific, as Netflix said that in 2020, viewing of K-contents increased more than 4 times compared to 2019.
On the other hand, since Netflix monopolizes content copyright, it is known that there are no additional incentives even if content made by domestic producers is successful.
Netflix has increased related traffic 67 times in the past four years to generate revenue for its services, but is refusing to pay the network usage fee accordingly. Traffic directly linked between SKB and Netflix increased 67 times over four years from 22 Gbps in January 2018 to 1743 Gbps at the end of last year. As of the fourth quarter of 2021, Netflix (7.2%) accounted for the second highest share of total Internet traffic after Google (27%), followed by Facebook (3.5%), Naver (2.1%), and Kakao (1.2%). ) appeared in that order.
In addition, Netflix plans to offer an 'advertisement plan' in Korea from the beginning of November next month, but it is criticized for being 'half-price, not half-price' due to occasional advertisements at the start and during content playback. This is expected to cause dissatisfaction from users, such as when an advertisement is played at a rate of 1 minute every 10 to 15 minutes of a video, 5 to 30 seconds of advertisements are frequently exposed when the corresponding rate plan is selected.
Rep. Kim Seung-soo said, "Netflix is increasing its overall sales and corporate value rapidly thanks to the success of K-content, but it is repeating its insincere attitude of ignoring its responsibilities in Korea."
He added, “We need to come up with measures to prevent domestic tax evasion by overseas big tech companies such as Netflix and actively improve the system to prevent the outflow of national wealth through normal tax payment.”
출처 : K trendy NEWS(http://www.k-trendynews.com)
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