Korea: Update on CbC reporting, transfer pricing rules | KPMG Global
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Korea: Update on country-by-country reporting, transfer pricing rules

Korea: Update on CbC reporting, transfer pricing rules

There are new forms for country-by-country (CbC) reporting and for the advance notification as to which company of a multinational group is to be the “reporting entity.” These forms were introduced by the Korean tax authority (known, in English, as the Tax & Customs Office of the Ministry of Strategy and Finance).


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Both a Master file and a Local file must be submitted for fiscal years beginning on or after 1 January 2016, by all domestic corporations and foreign corporations with Korea-source income when:

  • Sales revenue exceeds KRW 100 billion (approximately U.S. $89 million)
  • The volume of cross-border related-party transactions exceeds KRW 50 billion (approximately U.S. $44.4 million)

The Master file and Local file are to be filed with the head of the tax office having jurisdiction over the place where the tax payment is remitted, within 12 months from the fiscal year-end. 

The CbC report is also required to be submitted by domestic corporations (ultimate parent company) when the prior year’s consolidated sales revenue exceeds KRW 1 trillion. 

These reporting requirements were proposed in late 2016. Read TaxNewsFlash-Transfer Pricing

Arm’s length interest rate

The tax authority also updated the rules on the arm’s length interest rate applicable for loan transactions between a resident and a foreign related-party. The new rules set forth, among other items, the arm’s length interest rate for lending and borrowing involving a Korean resident taxpayer to a foreign related party.


Read a 2017 report prepared by the KPMG member firm in Korea: Korean Tax Brief


For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in South Korea:

Gil Won Kang | +82-2-2112-0907 | gilwonkang@kr.kpmg.com

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