South Korea has fully implemented the OECD’s BEPS Action 13 recommendations, including Country-by-Country Reporting (CbCR), through its domestic legislation. The CbCR obligations form a part of the broader transfer pricing documentation requirements and are intended to enhance transparency in the operations of multinational enterprise (MNE) groups.

This guide outlines South Korea’s CbCR requirements, including thresholds, submission procedures, deadlines, and penalties, to assist financial and tax leaders in ensuring compliance.

Regulatory Framework

• Authority: National Tax Service (NTS)
• Legislation:
  • Article 11-2 of the Law for Coordination of International Tax Affairs (LCITA)
  • Enforcement Decree of the LCITA
  • Presidential Decree No. 28069 (2017)
• International Engagement:
  • South Korea is a member of the OECD Inclusive Framework on BEPS
  • Signatory to the Multilateral Competent Authority Agreement (MCAA) for CbCR

CbCR Filing Requirements

• Who Must File:
  • Ultimate parent entities (UPEs) resident in South Korea with consolidated annual revenues of KRW 1 trillion (approx. EUR 750 million)
  • Local entities of foreign MNEs may have to file locally if the UPE is not obligated or if exchange relationships are absent
• CbCR Notification:
  • Required by all Korean constituent entities
  • Deadline: within six months after the end of the fiscal year
• CbCR Submission:
  • Deadline: within 12 months of the end of the reporting fiscal year
  • Format: OECD-compliant XML, submitted via the NTS electronic filing system

Penalties for Non-Compliance

• Penalties for non-compliance include:
  • Failure to submit CbC Report: up to KRW 30 million
  • Incorrect or incomplete information: additional penalties may apply

Important Considerations

• CbCR is part of a three-tiered transfer pricing documentation framework (CbC Report, Master File, and Local File)
• South Korea conducts tax risk assessments based on CbCR data
• Consistency and completeness of data across all jurisdictions is critical

Useful Resources

• National Tax Service (NTS): https://www.nts.go.kr
• OECD CbCR Guidance: https://www.oecd.org/tax/beps/country-by-country-reporting.htm