Coupang Inc. Takes Legal Recourse Against 300 Billion Won Tax Bill, Cites Incheon Fire Damages

Coupang Inc. is initiating appeal procedures after receiving a notice from the National Tax Service (NTS) to pay approximately 300 billion won in additional taxes.

Coupang Inc. announced in its second-quarter consolidated earnings report submitted to the U.S. Securities and Exchange Commission (SEC) today that the NTS concluded its tax audits on corporate and value-added taxes for certain South Korean subsidiaries covering the 2021 to 2025 tax years last June, and issued the results notice.

The additional tax amount demanded by the NTS is approximately $208 million, including penalties and interest, which translates to about 300 billion won in Korean currency.

This notice primarily focused on transfer pricing and transactions between Coupang Corp. and Coupang Fulfillment Services (CFS).

The NTS proposed disallowing deductions for corporate tax purposes regarding service-related costs provided by Coupang Fulfillment Services to Coupang Corp., along with other tax adjustments.

Coupang Inc. stated, "We disagree with this anticipated taxation by the NTS and plan to actively explain our position through available administrative relief procedures and judicial litigation if necessary."

Coupang Inc. also stated that it has sufficiently set aside provisions in preparation for potential tax adjustments.

Losses from the Incheon logistics center fire that occurred last month are expected to be reflected in the financial results starting from the third quarter of this year.

Coupang Inc. stated that the fire at the leased logistics center in Incheon last July caused significant damage to facilities, leased fixtures, equipment, and inventory assets.

Prior to the fire, the book value of Coupang-held inventory, fixed assets, and payable obligations related to seller inventory at the facility were estimated at approximately $246 million.

This is estimated to be about 350 billion won in Korean currency.

However, this is not the final fire loss amount.

The company stated that it is currently difficult to reasonably estimate the total losses and financial impact, and it plans to pursue insurance claims under property and liability insurance.

Previously, Coupang Inc. recorded an operating loss of $556 million in the second quarter of this year after reflecting fines related to a personal information leakage incident.

(Reported by Kim Jiuk | Video by Na Hong-hee | Graphics by Lee Jung-joo | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.