South Korea may push for mandatory disclosure of ad revenue for streaming video services... Attention focused on Netflix tax

The South Korean government has announced a policy to require online video streaming services (OTT) such as Netflix to disclose their domestic advertising revenues.
The ad revenues on the form were not even tallied, raising questions about whether ad revenues from Netflix and other companies are being properly taxed.
The Ministry of Science, Technology and Information Technology has recently launched a study on "Derivation of Improvement Plans for Broadcasting and Communications Advertising Expenditure Survey in Accordance with Changes in the Advertising Environment."
According to the South Korean media outlet Herald Business, the study recommended expanding the scope of the investigation to include advertising, which had not been included in previous studies.
In essence, the recommendation is to understand the advertising revenues of digital platforms such as Netflix.
The survey on broadcasting and communications advertising expenditures investigates sales of online (display and search advertising), broadcasting (internal advertising, broadcast sponsorship, etc.), and outdoor (rooftop, wall, etc.) advertising.
However, there was an issue in that advertising revenues from digital platforms were not included in the calculation.
In particular, the study suggests the following methods for determining advertising revenue:
"The introduction of a bill that would make it mandatory for digital advertising platforms with sales above a certain level to report their advertising revenue to the government" and "The survey of advertisers to determine advertising expenses"
He introduced methods such as the "aggregation method" and the "method of estimating expenses for digital media through advertising agencies and media agency personnel." These are essentially methods that force reporting of advertising revenue.
Attention is focused on whether the accounting of Netflix's advertising revenue will lead to taxation. The industry has pointed out that a significant number of Netflix users in South Korea use the "advertising-supported plan."
Professor Byun Sang-gyu of Hoseo University said in a statement by the Korean Society of Journalism that Netflix's annual advertising revenue in Korea is estimated to be 268.7 billion won.
It is estimated that the total will reach 371.6 billion won (approximately 28.6 billion yen) to a maximum of 371.6 billion won (approximately 39.6 billion yen).
Netflix's Chief Advertising Officer, Reinhard, visited Korea for the first time and held business meetings with many advertisers and agencies.
"More than 55% of viewers chose the plan," he said. This is being interpreted as a sign that the company is ramping up efforts to earn advertising revenue based on multiple popular content.
An industry insider said, "The disclosure of advertising revenues by global OTT operators is an important first step towards transparent business operations in the domestic market."
He also emphasized that "Netflix also has an obligation to pay appropriate corporate taxes, including advertising revenue, in Korea." He added, "This will create a fair competitive environment and protect the healthy development of the domestic media industry."
However, an official from the Ministry of Science, Technology and ICT said, "Even if the advertising revenue of OTTs such as Netflix is known, the information on individual companies is not available.
It will not be communicated to the relevant ministries and agencies," he said, taking a cautious stance.