Seoul: The South Korean unit of online retailer Coupang transferred more than 900 billion won (US$620 million) in expenses to its headquarters in the United States in 2024.

According to Yonhap News Agency, an industry report revealed that Coupang's related-party expenses sent to its U.S. head office or other affiliated companies totaled 939 billion won in 2024 as per the company's audit report.

The audit report further indicated that expenses transferred to the U.S., including service fees and royalties, accumulated to more than 2.5 trillion won from 2020 to 2024. However, the report only provided broad expense categories, complicating efforts to determine whether these were calculated at fair market value.

Industry observers have expressed concerns that this financial structure might be intended to decrease profits at the South Korean unit while increasing assets at the U.S. parent company. There are also questions regarding the transparency of these transactions, suggesting potential efforts to minimize tax liabilities in both countries.

A tax expert, who spoke on condition of anonymity, commented, "Dividends are clearly taxable, but service fees and royalties are areas where determining appropriateness is difficult, which is why tax avoidance controversies repeatedly arise. Transparency is especially important when transactions involve a parent company."

South Korea's tax authorities have reportedly initiated an in-depth investigation into Coupang, focusing on transactions with its U.S.-based headquarters. The company is also facing increased scrutiny due to a data breach, which authorities estimate impacted nearly 33 million users. Coupang maintains that data from only about 3,000 accounts was leaked, a figure contested by regulators.