Tax agency mulls taxation for Google's 30% commission

(Google Play)

South Korea's tax agency said Saturday it will consider imposing taxes on Google Inc.'s planned enforcement of a 30 percent commission on in-app purchases of digital content from its Play Store next year.

In a written answer submitted to Rep. Kim Soo-hong of the ruling Democratic Party, the National Tax Service said it will consider various measures to impose taxes on Google's income from the fees and will closely monitor the size of Google's sales in the domestic application market.

The NTS said it can levy taxes on the US tech giant as the company does business through agents or affiliated companies in Korea despite the lack of a physical office.

Google has recently come under intense scrutiny from regulators after it adopted a new policy last month to make all apps on its Play Store use its proprietary billing system.

Under the new policy set to take effect in October next year, Google plans to take a 30 percent commission on all digital content purchases by users.

In January, the tax agency slapped 600 billion won ($532 million) in corporate taxes on Google Korea as it stated the US company makes profits from its business in Korea.

Google Korea paid the taxes but at the same time it filed a complaint against the corporate tax with the Tax Tribunal.(Yonhap)