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After grabbing the spotlight with its announcement that it will keep separate records of its sales and earnings in South Korea and report those to the local tax authorities as early as next year, Facebook is once again in the news with its promotion to a vice chair company position with the Korea Internet Corporations Association (K-Internet). K-Internet is an interest group for internet companies such as Naver, Kakao, Google Korea and Facebook Korea.

During a meeting on the morning of Feb. 1, the K-Internet board of directors upgraded Facebook Korea from a normal member company to a vice chair company. Starting this year, Facebook Korea will get a seat on the board of directors in exchange for paying 20 million won (US$18,600) of dues each year (instead of the 1 million paid by normal member companies). K-Internet’s board of directors is composed of Naver (chair company), Kakao and eBay Korea (senior vice chair companies) and eight vice chair companies, including Facebook Korea.

At the end of last year, Facebook Korea let K-Internet know that it wanted to be upgraded to a vice chair company and to join the board of directors. “Since Facebook unveiled its new vision statement ‘to give people the power to build community and bring the world closer together,’ we have been aggressively promoting participation in communities. We asked for permission to join the board of directors to find a way to participate in the industry community and contribute to South Korea’s internet ecosystem. Moving forward, we will be taking interest in industry issues and participating in those,” Facebook Korea said.

After coming under fire for tax evasion because of its practice of concentrating sales in countries with low tax rates, the Facebook main office recently announced that it would keep separate track of sales and earnings in countries with a local office (such as South Korea) and file them with the local tax authorities. This country-specific bookkeeping approach could begin as early as this year.

Facebook was also accused of heavy-handed tactics after it got into a tussle with South Korea’s mobile service providers over the question of usage fees for domestic internet networks. This led to testimony by Facebook representatives at last year’s parliamentary audit and an investigation by the Korea Communications Commission.

By Kim Jae-seop, staff reporter

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