泥中蟠龍's Game愛歌 _ A tax on a digital signal

泥中蟠龍's Game愛歌

[A love song for games of the dragon waiting for an opportunity]

 

A tax on a digital signal

 

Recently, aside from public interest, there was a cultural-content-related big issue in Korea's investment industry. Filmmaker R & K—a production company produced The Berlin File, a 2013 South Korean action thriller film—had to pay its tax on an external hard disk drive stored video clips which were filmed in overseas locations since it lost the case for withdrawal of tax enforcement by the Seoul Administration Court.

 

Here are some of the details of step-by-step processes.

 

1. The filmmaker R & K declared an empty hard disk drive as a piece of filming equipment at the customhouse ahead of its departure.

2. R & K took a film with local production in Germany and its neighbors.

3. R & K paid the local film studio and the interested party about 2.2 billion won.

4. R & K brought back the portable data storage device with video clips into the country without additional customs declaration.

5. Korea Customs imposed R & K to pay 220 million won—value-added tax of the images-containing hard disk—and 66 million won in fines.

 

I don't like to raise a question about the court declaring itself although it sounds like nonsense to me. But one of the problems is that the film studio didn't be treated fairly before the law. I've never heard of that a staff member of Samsung Electronics or LG Electronics had been imposed a tax on a laptop stored program source which he/she had developed on an overseas business trip. It's hard to understand that the authorities concerned regards unfair tax on the only apparently-identified item as the proper enforcement. It seems not to differ essentially from excessive tax burdens on salaried workers who are mockingly called "glass wallets". But there are other things that I want to mention first.

The government needs to implement a new system and policy for a creative economy, Information and Communications Technology (ICT), and convergence, not just talking about them. If the images were stored on a cloud server and downloaded within the country, they would be nontaxable. The legal interpretation to charge the tax on digital signals because they were stored in the portable data storage device is too farfetched, allowing for the law. By the logic, if 100 people have copied files, they have to pay one-hundredth of the tax amounts respectively because the tax is paid on goods with its value. It's undesirable to apply the current law for manufacturing to a new type of digital content. Social Overhead Capital (SOC) means basic services and facilities required for the societies and communities. SOC is the public infrastructures including transportation, education, utilities, etc,. however, it covers laws and policies in a broad sense. SOC for digital contents industry is desperately lacking. It's hard to find news about infrastructure investment for digital contents, while new roads are constructed and distribution centers are kept building. I desire government support for imperatively-necessary public infrastructures not pouring forth policies that make it seems caring. Frankly speaking, I just hope there are no more new restriction policies for the gaming industry. We don't even expect various tax benefits or support policy for the IT industry.

 

※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.

   (http://www.khgames.co.kr)

    Translation by Kim Ki-hui