Netflix Wins Partial Victory in Korea Tax Lawsuit, Court Cancels 68.7 Billion Won
A South Korean court ruled that 68.7 billion won in taxes should be canceled, finding that payments to Netflix's Dutch affiliate were not copyright compensation but service fees.Summary
A Seoul Administrative Court ruled partially in favor of Netflix Services Korea, canceling 68.7 billion won ($47 million) of the 76.2 billion won in corporate taxes imposed by the National Tax Service. The court determined that the payments made by the Korean unit to its Netherlands affiliate were not compensation for the use of copyrights, but rather fees for providing content streaming services to domestic consumers. The ruling cited the limited scope of the Korean unit's activities, which were confined to ancillary functions like platform operations and advertising, while the core functions of storage and transmission were performed by overseas affiliates. Furthermore, the court rejected the tax authority's assessment, arguing that the payment structure was designed to guarantee a certain operating profit for platform operations and marketing, rather than representing independent copyright revenue generation.
(Source：서울경제)