Coupang's South Korean unit transferred $620M to US headquarters in 2024: Report

ISTANBUL

The South Korean subsidiary of US-listed e-commerce company Coupang transferred more than 900 billion won ($620 million) in expenses to its US headquarters in 2024, according to an industry report reviewed by Yonhap News Agency on Sunday.

Coupang’s audit report showed that “so-called related-party expenses” paid to its head office or other US-based affiliates hit 939 billion won last year.

The report indicated that expenses transferred to the US, including service fees and royalties, exceeded 2.5 trillion won ($1.7 billion) from 2020 - 2024.

Industry observers have expressed concerns that the arrangement may be structured to lower profits at the South Korean unit while boosting assets at the US parent company.

"Dividends are clearly taxable, but service fees and royalties are areas where determining appropriateness is difficult, which is why tax avoidance controversies repeatedly arise," according to a tax expert who requested anonymity.

"Transparency is especially important when transactions involve a parent company."

South Korean tax authorities are reportedly conducting an extensive probe into Coupang, including transactions with its US-based headquarters.

The company is also facing increased scrutiny following a data breach that authorities estimate may have affected nearly 33 million users. Coupang has stated that information from only about 3,000 accounts was compromised, a claim disputed by regulators.