Seoul:The Supreme Court has dismissed an appeal by South Korea's tax authority, effectively upholding a lower court's ruling in favor of Google Korea in a corporate tax cancellation case involving about 154 billion won (US$115.3 million), judicial officials said Monday.

According to Yonhap News Agency, the top court left intact the Seoul High Court's ruling siding with Google Korea in its lawsuit against the head of Seoul's Yeoksam Tax Office by dismissing the defendant's appeal without substantive review.

The dispute arose when the tax office imposed corporate and local income taxes totaling around 154 billion won on Google Korea in 2020. The tax authority argued that the company's transfer of part of its income to Google Asia Pacific, based in Singapore, was subject to taxation, classifying the payments as royalty income derived from the use of copyrights and knowhow.

Google Korea contested this classification, asserting that the payments were business income for Google Asia Pacific and thus not taxable in South Korea. The Seoul Administrative Court ruled in favor of Google Korea, a decision that was subsequently upheld by the Seoul High Court.