Among the top 100 semiconductor companies by market capitalization in the world, South Korea’s Samsung Electronics and SK Hynix pay the most in corporate taxes.

(European News Agency)

[Financial Channel/Comprehensive Report] Among the top 100 semiconductor companies in the world by market capitalization, South Korea’s Samsung Electronics and SK Hynix pay the most in corporate taxes, ranking the top 2. SK Hynix’s revenue last year was far behind TSMC and Intel’s tax payment However, the amount was 30% and 70% higher respectively, making the two major Korean semiconductor companies feel sad.

The Dong-A Ilbo and the Federation of Korean Industries analyzed the operating indicators of the top 100 semiconductor companies in the world (including TSMC in Taiwan, Intel in the United States, and SMIC in China) last year. The effective corporate tax rates of Samsung Electronics and SK Hynix last year were respectively 25.2% and 28.3%.

The effective tax rate can be calculated by dividing the tax by the company's pre-tax profit.

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As the world's first generation factory, TSMC only pays 10% corporate tax; Intel pays 8.5% and SMIC pays 3.5%.

Micron of the United States, which ranks third after Samsung Electronics and SK Hynix in the field of memory chip manufacturing, also pays only 7.1% in corporate taxes.

Even with less sales, Korean companies pay more taxes.

At the end of last year, SK Hynix had annual sales of US$36.097 billion, less than TSMC's US$57.28 billion and Intel's US$79.02 billion.

However, SK Hynix paid US$3.19 billion in corporate taxes, 33.8% and 73.8% higher than TSMC (US$2.38 billion) and Intel (US$1.8 billion), respectively; SMIC paid US$65.2 million in corporate taxes last year.

Countries promote tax incentives, South Korea relatively backwards

Countries around the world are scrambling to provide unprecedented tax incentives to boost the semiconductor industry.

In contrast, South Korea's high tax rate makes companies feel that the policy is going backwards.

South Korea's ruling and opposition parties recently agreed to amend the "Special Tax Restriction Act" to increase the tax deduction for equipment investment of large chip manufacturers from 6% to 8%.

On the other hand, the United States and Taiwan have passed or are seeking tax credits of up to 25% for investment in semiconductor facilities.

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