At a glance
#Dates are for an example year end of Dec 31, 2025. Where local law moves a deadline on a weekend or national public holiday to the next working day, the date shown is already moved. Use the Deadlines tool for your own year end and thresholds.
Verified 2026-10-26. Tax authority: National Tax Service (국세청, NTS). Summaries are simplified; check the linked official source before relying on them.
The law
#Korea applies the arm's length principle through the Adjustment of International Taxes Act (LCITA, 국제조세조정에 관한 법률), its Enforcement Decree and its Rule. The tax office can adjust a resident's tax base if a price with a foreign related party is above or below the arm's length price (art. 7). A related party is at least 50% voting ownership, or a common interest where one side controls the other's business policy (art. 2(1) item 3). A taxpayer may also report or claim a refund at the arm's length price (art. 6). The tax office can ignore or rebuild a transaction that is not commercially rational (art. 8(2) and (3)).
Documentation
#Companies with sales above KRW 100bn and foreign related party transactions above KRW 50bn file a master report and a local report within 12 months of the year end (LCITA art. 16(1), Decree art. 34). Any company with foreign related party transactions files an international transaction statement, a summary income statement of the foreign party and an arm's length price method report within 6 months of the year end, unless it is under the exemption limits (art. 16(2), Decree art. 36). These forms are due later than the corporate tax return, not with it. The tax office can also ask for pricing data, due within 60 days (art. 16(4) and (5)). Documents are in Korean, and the master report may be in English with a Korean version one month later.
Methods
#The law lists five methods: comparable uncontrolled price, resale price, cost plus, transactional net margin and profit split. A sixth, other reasonable methods, applies only if the first five cannot be used (art. 8(1)). The taxpayer picks the most reasonable one after looking at comparability, data quality and fit (Decree art. 14). A range can be built from two or more comparable deals. If a price is outside it, the adjustment is to the average, median, mode or another reasonable point (Decree art. 15(5) and (6)). Loss-making comparables can be used in a severe downturn (art. 15(7)).
Penalties
#Failing to file or filing false reports, statements or requested data brings a fine of up to KRW 100m, and up to KRW 200m more if not fixed within 30 days (LCITA art. 87). The Decree sets KRW 30m per report, KRW 5m per foreign related party for the statement and KRW 100m for the GloBE return, with cuts of 30% to 90% for late or corrected filings (art. 144). The tax office may estimate the arm's length price if the master and local reports are not filed (art. 16(7)). The 10% underreporting penalty, 40% for fraud (60% if offshore), is not charged if the taxpayer filed the local report on time or kept support and chose its method by reasonable judgement (art. 17(1) item 3; Framework Act art. 47-3). The normal limitation period is 5 years, or 7 years for international transactions (Framework Act art. 26-2).
Pillar Two
#Korea applies the IIR to fiscal years beginning on or after 1 January 2024, the UTPR to years beginning on or after 1 January 2025, and a domestic top-up tax (QDMTT) to years beginning on or after 1 January 2026 (LCITA chapter 5, Addenda of Acts 19191, 19928 and 21215). It covers groups with consolidated revenue of at least EUR 750m in two of the four prior years. A Korean entity files the GloBE Information Return, or says which foreign entity files it, and files and pays the top-up tax by the later of 15 months after the year end (18 months for the first year) and 30 June 2026 (art. 83 and 84). No separate registration was found. Tax over KRW 10m can be paid in two parts.
Other rules
#The corporate tax return is due 3 months after the year end, plus one month if an audited company applies (Corporate Tax Act art. 60). Under Framework Act on National Taxes art. 5(1), a deadline on a Saturday, Sunday, public holiday, substitute holiday or Labor Day moves to the next day, and this covers the LCITA, so rollWeekends is true. APAs can be unilateral or bilateral and must be requested by the day before the first year covered (art. 14). Mutual agreement requests must be made within 3 years of learning of the taxation (art. 42(2) item 4). Net interest paid to foreign related parties above 30% of adjusted income is not deductible, and a 2 to 1 debt to equity limit applies to loans from foreign controlling shareholders (6 to 1 for financial businesses; art. 22 to 24, Decree art. 50). Korean companies with overseas direct investments also file an overseas subsidiary report within 6 months (art. 58). A company with an approved APA must also send an annual report on the approved method within 12 months from the last day of the month in which the year ends (art. 15(3), Decree art. 32).
Filings and deadlines
#| # | Filing | When | Who | Source |
|---|---|---|---|---|
| 1 | Corporate income tax return (법인세 과세표준 및 세액신고서) Due within 3 months from the last day of the month in which the business year ends, so 31 March for a December year end (Corporate Tax Act art. 60(1), 60(3)). A company that must be audited under the External Audit Act can apply for up to one month more if its accounts are not settled (art. 60(7)); the application is due at least 3 days before the deadline (Decree art. 97(12)). Tax paid late in the extension carries interest (art. 60(8)). Corporations that must file a faithful-filing confirmation, for example real estate rental companies, get 4 months by law (art. 60(1), 60-2) but this is not modelled here. If the date falls on a Saturday, Sunday, public holiday or Labor Day, the next day is the deadline (Framework Act on National Taxes art. 5(1)). | Extended: external-audit company whose accounts are not settled; apply at least 3 days before the deadline (Corporate Tax Act art. 60(7)) (e.g. Apr 30, 2026); original due date Mar 31, 2026 | All domestic corporations liable to Korean corporate tax, including those with no income or with a loss. A foreign corporation with a Korean place of business files under art. 97 of the Act. | Corporate Tax Act art. 60 (law.go.kr) |
| 2 | International transaction statement (국제거래명세서) Due within 6 months from the last day of the month in which the business year ends, so 30 June for a December year end (LCITA art. 16(2)). This is later than the corporate tax return, which is due in 3 months. Filed electronically with the National Tax Service. Form No. 16 (Gap). A guarantee services annex (Eul) is added if there are guarantee transactions. A missing or false statement is fined KRW 5m per foreign related party (Decree art. 144(2) item 2), up to KRW 100m in total (LCITA art. 87(1)). Fines are cut by 30% to 90% if the statement is filed late within 2 years or corrected within 4 years of the deadline (Decree art. 144(6)). An extension of up to one year is possible for unavoidable reasons (LCITA art. 16(3), Decree art. 37), applied for at least 15 days before the deadline. | 6 months after year end (e.g. Jun 30, 2026) | Any company with transactions with a foreign related party, unless in the business year goods are KRW 500m or less, services KRW 100m or less and intangible assets KRW 100m or less (Decree art. 36 item 1). The tool tests total transactions above KRW 100m, which is the lowest trigger and can flag a company that is in fact exempt. | LCITA art. 16(2) and Decree art. 36 (law.go.kr) |
| 3 | Summary income statement of foreign related parties (국외특수관계인의 요약손익계산서) Due within 6 months from the last day of the month in which the business year ends, so 30 June for a December year end (LCITA art. 16(2)). This is later than the corporate tax return, which is due in 3 months. Filed electronically with the National Tax Service. Form No. 17. LCITA art. 87 names only the statement in art. 16(2) item 1, so no specific fine for this form was found. | With International transaction statement (국제거래명세서) (e.g. Jun 30, 2026) | Any company with foreign related party transactions, unless the totals by type are goods KRW 1bn or less, services KRW 200m or less and intangibles KRW 200m or less, or the company files the overseas subsidiary statement and financial table (Decree art. 36 item 2). | LCITA art. 16(2) and Decree art. 36 (law.go.kr) |
| 4 | Arm's length price method report (정상가격 산출방법 신고서) Due within 6 months from the last day of the month in which the business year ends, so 30 June for a December year end (LCITA art. 16(2)). This is later than the corporate tax return, which is due in 3 months. Filed electronically with the National Tax Service. Form No. 18 for services, No. 19 for intangibles and No. 20 for other transactions. It shows which arm's length method was used. LCITA art. 87 names only the statement in art. 16(2) item 1, so no specific fine for this form was found. | With International transaction statement (국제거래명세서) (e.g. Jun 30, 2026) | Any company with foreign related party transactions, unless the yearly totals are goods KRW 5bn or less, services KRW 1bn or less and intangibles KRW 1bn or less, or the totals with each foreign related party are goods KRW 1bn or less, services KRW 200m or less and intangibles KRW 200m or less (Decree art. 36 item 3). The tool tests total transactions above KRW 1bn, a rough proxy. | LCITA art. 16(2) and Decree art. 36 (law.go.kr) |
| 5 | CbC filing entity information (국가별보고서 제출의무자에 대한 자료) The Korean ultimate parent and each Korean related company must file data on who files the CbC report within 6 months from the last day of the month in which the business year ends, so 30 June for a December year end (Decree art. 35(2)). It is Form No. 15 (Rule art. 26). A company need not file the CbC report itself if the foreign parent files it and it is exchanged with Korea, or another Korean company files for it (art. 35(3)). LCITA art. 87 does not list this data, so no specific fine for a missing notice was found. A missing CbC report itself is fined KRW 30m (Decree art. 144(2) item 1). | 6 months after year end (e.g. Jun 30, 2026) | The Korean ultimate parent of a group with consolidated sales above KRW 1 trillion in the previous year, or a Korean related company of a foreign-parented group above the threshold set by the parent's country, or EUR 750m if that country has no CbC rule (Decree art. 35(1)). The tool uses KRW 1 trillion for every group. | LCITA Decree art. 35 (law.go.kr) |
| 6 | Master report (통합기업보고서) Filed within 12 months from the last day of the month in which the business year ends, so 31 December 2026 for a December 2025 year end (LCITA art. 16(1)). It covers the group's structure, business, intangibles, financing and finances (Decree art. 33 item 1) and is Form No. 12. It must be in Korean and filed electronically. An English version may be filed, but then a Korean version is due within one month (Decree art. 34(4)). One group member can file for others (Decree art. 34(2)). A missing or false report is fined KRW 30m per report (Decree art. 144(2)). If it is not filed, the tax office can estimate the arm's length price from other data (LCITA art. 16(7)). | 12 months after year end (e.g. Dec 31, 2026) | Domestic corporation, or foreign corporation with a Korean place of business, with sales above KRW 100bn and transactions with foreign related parties (goods, services, intangibles and loans) above KRW 50bn in the tax year. Both tests must be met (Decree art. 34(1)); the tool can only test sales. Short years are scaled to 12 months (Rule art. 22). | LCITA art. 16(1) and Decree art. 34 (law.go.kr) |
| 7 | Local report (개별기업보고서) Filed within 12 months from the last day of the month in which the business year ends (LCITA art. 16(1)). It covers the company's structure, business, transactions with foreign related parties, the price calculation and finances (Decree art. 33 item 2) and is Form No. 13. It must be in Korean. Transactions under an approved APA can be left out for the APA years. Filing it on time, or keeping the supporting data, is one of the ways to avoid the underreporting penalty (LCITA art. 17(1) item 3). A missing or false report is fined KRW 30m (Decree art. 144(2)). | With Master report (통합기업보고서) (e.g. Dec 31, 2026) | Same as the master report: sales above KRW 100bn and related party transactions above KRW 50bn (Decree art. 34(1)). The tool can only test sales. | LCITA art. 16(1), art. 17 and Decree art. 33 (law.go.kr) |
| 8 | Country-by-country report (국가별보고서) Due within 12 months from the last day of the month in which the business year ends (LCITA art. 16(1) item 2), so 31 December 2026 for a December 2025 year end. It is Form No. 14, written in Korean and English and filed electronically (Decree art. 35(4)). A missing or false report is fined KRW 30m per report (Decree art. 144(2)). | 12 months after year end (e.g. Dec 31, 2026) | Domestic ultimate parent company of a group with consolidated sales above KRW 1 trillion in the previous tax year. A Korean related company of a foreign-parented group files only if the parent's country has no filing duty, has no exchange with Korea, or no other Korean company files for it (Decree art. 35(1) and (3)). | LCITA art. 16(1) and Decree art. 35 (law.go.kr) |
| 9 | GloBE Information Return (글로벌최저한세정보신고서) Filed electronically with the competent tax office by the later of 15 months after the fiscal year end (18 months for the first applicable year) and 30 June 2026 (LCITA art. 83(1), Decree art. 141(1)). For a December 2024 year end that is 30 June 2026, and for December 2025 it is 31 March 2027. A designated domestic entity may file for the other Korean entities (art. 83(2)). Forms 53 and 54 (Rule art. 90). A missing or false return is fined KRW 100m (Decree art. 144(2) item 4). No fine is charged for the transition years if the entity took the steps in Decree art. 144(3), such as disclosing the calculations. The first applicable year is the group's first year under any GloBE rules, not only Korea's. | 15 months after year end (e.g. Mar 31, 2027) | Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding fiscal years, with an entity located in Korea (LCITA art. 62(1)). | LCITA art. 83 (law.go.kr) |
| 10 | Notice of the foreign entity that files the GloBE Information Return (국외 소재 구성기업 정보신고서) A Korean entity (or the designated domestic entity) that does not file the GloBE Information Return because a foreign group entity files it must say so by the same deadline as the return (LCITA art. 83(3) and (4)). The exemption applies if the competent authorities' agreement to exchange the return is in effect for that year (Decree art. 141(3)). Form No. 55 (Rule art. 90(2)). A missing notice is fined KRW 100m (Decree art. 144(2) item 5). | With GloBE Information Return (글로벌최저한세정보신고서) (e.g. Mar 31, 2027) | Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding fiscal years, with an entity located in Korea (LCITA art. 62(1)). Only where a foreign group entity files the return and Korea has an annual exchange agreement with that country. | LCITA art. 83 and Decree art. 141 (law.go.kr) |
| 11 | Top-up tax return and payment: income inclusion rule (추가세액신고서) Filed and paid with the competent tax office by the later of 15 months after the fiscal year end (18 months for the first applicable year) and 30 June 2026 (LCITA art. 84(1) and (2)). Form No. 56 (Rule art. 91). The return and the payment are due on the same day, with the amounts in won at the average exchange rate of the year (Decree art. 142). Tax above KRW 10m can be paid in two parts, the second within one month (two months for SMEs) after the deadline (LCITA art. 84(3)). For transition years the late payment interest is cut by half (art. 84(5)). | With GloBE Information Return (글로벌최저한세정보신고서) (e.g. Mar 31, 2027) | Korean parent entities that owe top-up tax under the IIR (LCITA art. 72), for fiscal years beginning on or after 1 January 2024. Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding fiscal years, with an entity located in Korea (LCITA art. 62(1)). | LCITA art. 72 and art. 84 (law.go.kr) |
| 12 | Top-up tax return and payment: undertaxed profits rule (소득산입보완규칙 추가세액신고서) Filed and paid by the same deadline as the GloBE Information Return (LCITA art. 84(1) and (2)). Form No. 56-2, with the calculation sheet (Form 57) or, if the Korean entities agree to name one payer, the designation and agreement (Form 58) (Decree art. 142, Rule art. 91). Allocation of the UTPR amount among Korean entities is chosen by the reporting entity (art. 73(5)). The return and the payment are due on the same day, with the amounts in won at the average exchange rate of the year (Decree art. 142). Tax above KRW 10m can be paid in two parts, the second within one month (two months for SMEs) after the deadline (LCITA art. 84(3)). For transition years the late payment interest is cut by half (art. 84(5)). | With GloBE Information Return (글로벌최저한세정보신고서) (e.g. Mar 31, 2027) | Korean entities allocated UTPR top-up tax (LCITA art. 73), for fiscal years beginning on or after 1 January 2025. Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding fiscal years, with an entity located in Korea (LCITA art. 62(1)). | LCITA art. 73 and art. 84 (law.go.kr) |
| 13 | Transfer pricing data requested by the tax office (과세당국 요구자료) The data must be filed within 60 days of the request, with one extension of up to 60 days for unavoidable reasons (LCITA art. 16(4) and (5)). Data used to keep the penalty protection under art. 17(1) item 3 must be filed within 30 days of the request (Decree art. 39(2)). Data is in Korean unless the tax office allows English (Decree art. 38(3)). Failure is fined KRW 30m, 50m or 70m by type of data (Decree art. 144(2) item 3), up to KRW 100m, then up to KRW 200m more if not fixed within 30 days (LCITA art. 87(2)). | Within 60 days of a tax authority request | Any taxpayer with international transactions, once the tax authority asks for data on how prices were set. | LCITA art. 16(4) to (7) and Decree art. 38 (law.go.kr) |
| 14 | Domestic top-up tax return and payment (내국추가세액신고서) Filed and paid by the same deadline as the GloBE Information Return (LCITA art. 84(1) and (2)). Form No. 59, with the calculation sheet (Form 60) or the designation and agreement (Form 61) (Decree art. 142, Rule art. 91). The domestic top-up tax was added by the amending Act of 23 December 2025, in force from 1 January 2026 (Addendum art. 3). The return and the payment are due on the same day, with the amounts in won at the average exchange rate of the year (Decree art. 142). Tax above KRW 10m can be paid in two parts, the second within one month (two months for SMEs) after the deadline (LCITA art. 84(3)). For transition years the late payment interest is cut by half (art. 84(5)). | Starts with years ending on or after 2026-12-30 | Korean entities that owe the domestic top-up tax (QDMTT, LCITA art. 73-7), for fiscal years beginning on or after 1 January 2026. Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding fiscal years, with an entity located in Korea (LCITA art. 62(1)). | LCITA art. 73-7 and art. 84 (law.go.kr) |
Official texts
#- Adjustment of International Taxes Act (LCITA), its Enforcement Decree and Rule, Framework Act on National Taxes, Corporate Tax Act and its Enforcement Decree (law.go.kr) (Free of copyright: laws, decrees and rules, official notices, and government compilations or translations of them are not protected (Copyright Act art. 7 items 1 to 4))