On 27 August 2020, the South Korean National Tax Service has announced that it has initiated a tax audit on 21 multinational enterprises (MNEs) suspected of cross-border and committing tax evasion and 22 offshore tax evasion suspects, including domestic property prices. Among them, a large number of online platform companies are enjoying a boom due to the spread of COVID-19 pandemic, such as an online video company Netflix Korea subsidiary and Delivery Korea, a delivery platform Yogiyo operator.
NTS states that Netflix Korea avoided taxes and transferred income abroad by sending management consulting fees to the headquarters of Netflix in California and Delivery Korea dodged taxes by disguising its sales as non-taxable income. The NTS is planning to accuse and impose a surtax of up to 60% on every detected intentional tax evasion.
