April 26, 2024

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[THE INVESTOR] US software behemoth Oracle has dragged the National Tax Service to court over its decision to impose heavy penalties for alleged tax evasion, according to news reports on April 11.

Following an audit in 2014, the tax authority slapped the California-based software firm with fines of more than 300 billion won (US$262.50 million) for failing to pay due taxes on 2 trillion won profits it earned from 2008 to 2014 in the local market. 

The US firm lodged a protest in April last year but failed to convince the NTS to rescind its decision.

In February this year, the company lodged an appeal at the Seoul Administrative Court seeking to nullify the Korean tax watchdog’s ruling.

Oracle is accused of having avoided paying taxes during the period by transferring its earnings to its Irish office, instead of its US head office, from 2008 to 2014.

The tax office believes the US software firm had used its Irish office as an offshore tax haven.

Irish companies running businesses in Korea are exempt from paying corporate taxes due to a tax pact between Korea and Island.

An Oracle Korea spokesperson declined to give details of the court case, saying the Korean office has abided by the local tax laws.

By Kim Young-won (wone0102@heraldcorp.com)