The Global Minimum Tax (Pillar Two) has recently been introduced in Korea through amendments to the Adjustment of International Taxes Act. This email provides a summary of the key requirements for multinational enterprise (MNE) groups with subsidiaries in Korea.

Pillar Two applies to MNE groups with annual consolidated revenue exceeding EUR 750 million.

RSM Korea’s View

Accordingly, if your group’s annual consolidated revenue is well below this threshold, there should be no immediate concern. However, if the group grows significantly and approaches the threshold, the Pillar Two requirements should be closely monitored.

If your group’s annual revenue based on its consolidated financial statements exceeds the threshold, the Korean constituent entity is, in principle, required to prepare and file a GloBE Information Return (GIR) with the Korean tax authorities. The GIR contains a broad range of complex tax information. However, the Korean entity may be exempt from filing a comprehensive GIR in Korea where either the Ultimate Parent Entity (UPE) or a Designated Filing Entity (DFE) files a single GIR on behalf of the MNE group under the global filing mechanism (GIT).

If you are familiar with the Country-by-Country Report (CbCR) notification, the concept of filing a GloBE Information Return Notification (GIRT) is broadly similar.

※ In order to qualify for the exemption from local GIR filing under the global filing mechanism (GIT), a Qualifying Competent Authority Agreement (QCAA) for the exchange of GloBE information between the jurisdiction of the relevant constituent entity and the jurisdiction in which the GIR is filed must be in effect by the applicable filing deadline.