Samsung Electronics, SK hynix Pay Over 11 Trillion Won in Corporate Taxes in First Half... Second Highest on Record for a Half-Year Period

Despite Based on Last Year’s Results, Up 167% Year-on-Year

Surging Earnings Point to Record-High Annual Corporate Tax

The total corporate tax paid by Samsung Electronics and SK hynix in the first half of this year surpassed 11 trillion won. This amount, paid based on their earnings from the previous year, marks the second-highest level ever for a half-year period, reflecting the continued strength in the semiconductor industry.

Samsung Electronics Seocho Building, Seocho-gu, Seoul. Photo by Yonhap News Agency

According to the Financial Supervisory Service’s electronic disclosure system on August 30, Samsung Electronics paid 3.9876 trillion won in corporate taxes in the first half of this year, while SK hynix paid 7.2207 trillion won. The combined corporate tax payment from both companies reached 11.2083 trillion won, a 167% increase from the 4.1906 trillion won reported in the same period last year.

This is the second-largest amount ever paid for a half-year period, surpassed only by the 12.6614 trillion won recorded in the first half of 2019. Samsung Electronics saw its payment rise 256% from 1.1187 trillion won in the previous year, and SK hynix posted a 135% increase from 3.0719 trillion won. For SK hynix, the amount surpassed its previous half-year record of 4.5264 trillion won in the first half of 2019.

The first half of 2019 reflected the boom in the semiconductor industry in 2018. That year, Samsung Electronics recorded an all-time high annual operating profit of 58.9 trillion won, while SK hynix posted a record 20.8 trillion won in operating profit.

There is a time lag between earnings performance and corporate tax payments. Companies whose fiscal year ends in December typically finalize and pay the previous year’s corporate taxes in March and make an interim payment for the current year in August. For companies subject to disclosure obligations, the interim corporate tax payment is calculated based on their first-half earnings.

SK hynix Headquarters, Icheon-si, Gyeonggi Province. Photo by Yonhap News Agency

In the first half of this year, Samsung Electronics and SK hynix recorded operating profits of 146.7 trillion won and 98.2 trillion won, respectively, representing a dramatic increase from 11.4 trillion won and 16.7 trillion won in the first half of last year. For the full year, the most recent consensus compiled by Yonhap Infomax projects operating profits of 385 trillion won for Samsung Electronics and 266 trillion won for SK hynix, around six to nine times higher than last year’s annual figures.

Accordingly, there is growing speculation that corporate tax payments for the interim payment in August and the final payment in March next year could reach record-breaking levels. Some expect the two companies’ combined annual operating profits to reach 500 trillion to 600 trillion won, and assuming an effective corporate tax rate of 20%, the total amount paid could exceed 100 trillion won annually.

However, these are simply estimates based on straight calculations. The actual amount of corporate tax paid may vary depending on tax credits or deductions for research and development and domestic investment, as well as the details of the interim payment method. Given that both Samsung Electronics and SK hynix are significantly increasing their facility investments and R&D spending, the actual tax payments are likely to differ from those calculated using a simple effective tax rate.

This content was produced with the assistance of AI translation services.