2015 International Tax Coordination Law Changes - Update

The government announced the following change to the Enforcement Regulations of International Tax Coordination Law (ITCL- ER) which came into force from the fiscal year starting on or after January 1, 2015.

• Transfer Pricing Rules - Requirements for Submission of Summary Profit and Loss Statement of Overseas Specially Related Parties (Article 6-2 of ITCL - ER)

  A company which meets the following conditions may not submit the summary profit and loss statement of overseas specially related parties (OSRP) under the previous regulations: 

  (1) Goods transactions (both sale and purchase) with each OSRP shall not exceed Won 1 billion per year; AND

  (2) Service transactions (both rendered and received) with each OSRP shall not exceed Won 100 million per year.

  However, under the revised ITCL- ER, the threshold of condition (2) above was increased to Won 200 million per year.