Samsung Electronics and SK hynix pay 11 trillion won in corporate taxes in first half alone; annual total could top 100 trillion won

[Financial News] Samsung Electronics and SK hynix paid more than 11 trillion won in corporate taxes in the first half of this year. That is the second-largest amount ever for a half-year period. As improved earnings from last year’s strong semiconductor market are now being fully reflected in tax revenue, the two companies’ operating profits are expected to rise sharply this year as well, raising expectations that their corporate tax payments could hit a record high. 
According to semiannual and business reports submitted to the Data Analysis, Retrieval and Transfer System (DART) of the Financial Supervisory Service on the 30th, Samsung Electronics and SK hynix paid 3.9876 trillion won and 7.2207 trillion won in corporate taxes in the first half, respectively, for a combined 11.2083 trillion won. That is up 7.0177 trillion won, or 167%, from 4.1906 trillion won in the same period last year. 
This is also the second-largest half-year total on record, after 12.6614 trillion won in the first half of 2019. The record first-half corporate tax payment in 2019 is understood to have reflected the companies’ 2018 earnings, when the semiconductor industry was in a super boom. Companies with a December fiscal year-end typically file and pay the previous year’s corporate tax in March and make an interim prepayment in August, meaning corporate taxes are paid twice a year. 
In 2018, surging demand for server and mobile semiconductors pushed Samsung Electronics’ annual operating profit to a record 58.9 trillion won. SK hynix also posted operating profit of 20.8 trillion won that year, its highest level before the effects of high-bandwidth memory (HBM) became fully visible in 2024. Given this lag in earnings recognition, the companies’ corporate tax payments are expected to increase more substantially going forward than they did in the first half of this year.
For the roughly 2,600 corporations belonging to Business Groups Subject to Disclosure, corporate tax paid as an interim prepayment in August is calculated based on a provisional settlement of first-half results. Under this standard, Samsung Electronics and SK hynix posted first-half operating profits of 14.67 trillion won and 9.82 trillion won, respectively, up from 1.14 trillion won and 1.67 trillion won in the same period last year, a sixfold to 13-fold increase.
That is expected to translate into a sixfold to ninefold increase from last year’s operating profits of 4.35 trillion won and 4.72 trillion won, respectively. As a result, analysts expect the companies to set new records not only for the interim prepayment due in August this year, but also for the corporate tax due in March next year on this year’s earnings. 
Specifically, if the combined annual operating profit of the two companies on an individual basis, which serves as the basis for corporate tax payments, reaches 50 trillion to 60 trillion won and an effective corporate tax rate of 20% is applied, the annual tax bill could exceed 100 trillion won.
However, the final corporate tax payment is only a rough estimate that does not take into account tax credits for research and development or domestic investment, or the calculation method for interim prepayments. Actual payments may vary depending on detailed assessment methods and deduction benefits. In fact, both Samsung Electronics and SK hynix are sharply increasing facility investment and R&D spending, setting new record highs. 
[email protected] Lim Su-bin Reporter