By Kim Jae-won
The nation's tax agency has been auditing Chinese smartphone maker Huawei's Korean unit since last week, looking into transactions with its headquarters in Shenzhen, southern China, company officials said Tuesday.
Huawei Korea said that a group of investigators from the National Tax Service (NTS) have been examining its financial documents as part of their regular tax audit of the company. Companies with sales of more than 500 billion won are subject to the agency's regular tax audits every five years.
"We are under tax audit, but that is nothing unusual," said a Huawei spokeswoman. "No specific issues have been raised yet."
The tax audit comes two months after Huawei sued Samsung Electronics in the U.S. and China, claiming that the Korean IT giant infringed on as many as 11 patents related to the industry standard for fourth-generation (4G) mobile devices.
Sources familiar with international taxation said that the tax agency may look into Huawei Korea's internal transactions with its headquarters, examining whether they manipulated their transfer price to evade corporate taxes here.
Transfer price is a key issue in international taxation as many global companies manipulate prices in their trading with overseas subsidiaries to cut profits intentionally in countries imposing higher corporate tax rates.
The audit is the latest case of the Chinese company being hit by the Korean government. Last month, the prosecution raided Huawei's local unit in downtown Seoul, seizing documents related to a Korean executive of the firm suspected of stealing telecommunication technology from Ericsson-LG.
In 2015, Huawei's revenue reached 395 billion Chinese yuan ($60.8 billion), up 37 percent from a year ago, according to the company. Its net profits reached 36.9 billion yuan. Huawei Carrier, Enterprise, and Consumer Business Groups all achieved strong growth.
Huawei is a leading global information and communications technology (ICT) provider. It is the third-largest smartphone maker in the world, having a market share of 8.3 percent in the first quarter, following the global leader Samsung Electronics with 23.2 percent and the second-largest player Apple with 14.8 percent.
The Chinese company has established a competitive ICT portfolio of end-to-end products in telecom and enterprise networks, devices and cloud computing. Its ICT products, and services are used in more than 170 countries and regions, serving over one-third of the world's population.
The nation's tax agency has been auditing Chinese smartphone maker Huawei's Korean unit since last week, looking into transactions with its headquarters in Shenzhen, southern China, company officials said Tuesday.
Huawei Korea said that a group of investigators from the National Tax Service (NTS) have been examining its financial documents as part of their regular tax audit of the company. Companies with sales of more than 500 billion won are subject to the agency's regular tax audits every five years.
"We are under tax audit, but that is nothing unusual," said a Huawei spokeswoman. "No specific issues have been raised yet."
The tax audit comes two months after Huawei sued Samsung Electronics in the U.S. and China, claiming that the Korean IT giant infringed on as many as 11 patents related to the industry standard for fourth-generation (4G) mobile devices.
Sources familiar with international taxation said that the tax agency may look into Huawei Korea's internal transactions with its headquarters, examining whether they manipulated their transfer price to evade corporate taxes here.
Transfer price is a key issue in international taxation as many global companies manipulate prices in their trading with overseas subsidiaries to cut profits intentionally in countries imposing higher corporate tax rates.
The audit is the latest case of the Chinese company being hit by the Korean government. Last month, the prosecution raided Huawei's local unit in downtown Seoul, seizing documents related to a Korean executive of the firm suspected of stealing telecommunication technology from Ericsson-LG.
In 2015, Huawei's revenue reached 395 billion Chinese yuan ($60.8 billion), up 37 percent from a year ago, according to the company. Its net profits reached 36.9 billion yuan. Huawei Carrier, Enterprise, and Consumer Business Groups all achieved strong growth.
Huawei is a leading global information and communications technology (ICT) provider. It is the third-largest smartphone maker in the world, having a market share of 8.3 percent in the first quarter, following the global leader Samsung Electronics with 23.2 percent and the second-largest player Apple with 14.8 percent.
The Chinese company has established a competitive ICT portfolio of end-to-end products in telecom and enterprise networks, devices and cloud computing. Its ICT products, and services are used in more than 170 countries and regions, serving over one-third of the world's population.
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