The corporate tax payments of Samsung Electronics and SK Hynix surpassed a combined 11 trillion won in the first half of this year, marking the second-largest half-year total on record.

This figure is based on last year's earnings. Given the recent steep upward trend in performance, cautious projections suggest that this year's annual total could easily surpass the previous record of 15 trillion won and potentially reach up to 100 trillion won.

According to the half-year and business reports submitted to the Financial Supervisory Service's electronic disclosure system, corporate tax payments for the first half stood at 3.9876 trillion won for Samsung Electronics and 7.2207 trillion won for SK Hynix, bringing the combined total to 11.2083 trillion won.

On a combined basis, this represents a sharp 167 percent surge of 7.0177 trillion won compared to 4.1906 trillion won in the first half of last year.

This is also the second-largest half-year scale on record, following the 12.6614 trillion won recorded in the first half of 2019.

Individual tax payments for Samsung Electronics and SK Hynix in the first half increased by 256 percent and 135 percent, respectively, compared to 1.1187 trillion won and 3.0719 trillion won in the same period last year.

SK Hynix also set a record for its largest-ever half-year corporate tax payment, exceeding the 4.5264 trillion won recorded in the first half of 2019.

The combined record corporate tax payment for both companies in the first half of 2019 reflects the earnings from 2018, which followed a super-boom in the semiconductor industry.

In general, companies with a December fiscal year-end pay corporate taxes twice a year: filing and paying the previous year's taxes in March, and making interim tax prepayments for the current year in August.

Indeed, fueled by a surge in demand for server and mobile semiconductors in 2018, Samsung Electronics' annual operating profit reached a record high of 58.9 trillion won.

In the same year, SK Hynix's operating profit also stood at 20.8 trillion won, which was the highest prior to 2024 when the High Bandwidth Memory (HBM) effect fully materialized.

Considering this earnings recognition lag, the corporate tax payments of Samsung Electronics and SK Hynix are expected to increase even more going forward compared to the first half of this year.

For some 2,600 corporations belonging to large enterprise business groups subject to disclosure (excluding small and medium-sized enterprises), corporate taxes paid as interim prepayments in August are calculated based on provisional results of the current year's first half.

Following this standard, the first-half operating profits of Samsung Electronics and SK Hynix reached 146.7 trillion won and 98.2 trillion won, respectively, surging roughly 6 to 13 times compared to 11.4 trillion won and 16.7 trillion won in the first half of last year.

Furthermore, market consensus estimates for this year's operating profit stand at 385 trillion won for Samsung Electronics and 266 trillion won for SK Hynix.

This is expected to represent a 6- to 9-fold increase compared to last year's operating profits of 43.5 trillion won and 47.2 trillion won, respectively.

Consequently, it is virtually certain that both the interim prepayment in August and this year's corporate tax due in March next year will successively break all-time records.

The previous combined annual corporate tax record for Samsung Electronics and SK Hynix was 15.6387 trillion won in 2019, but the combined total already surpassed 11.2 trillion won in the first half of this year alone, with even better performance expected in the second half.

Specifically, assuming that the combined operating profit of both companies on an individual basis—which serves as the basis for corporate tax calculation—reaches between 500 trillion and 600 trillion won, and applying an effective corporate tax rate of 20 percent, estimates suggest annual payments could exceed 100 trillion won.

Since this is a simple calculation that does not account for tax credits for research and development and domestic investments or interim prepayment calculation methods, the actual tax payments may vary depending on detailed calculation methods and tax deduction benefits.

In fact, both Samsung Electronics and SK Hynix are significantly increasing facility investments and research and development expenses, breaking all-time records.

Because August interim tax prepayments are based on first-half performance, the tax payments could potentially be smaller compared to this year's operating profit forecasts, where the second half accounts for a larger share.

(Photo: Yonhap News)