l Reporting requirements of Base Erosion and
Profit Shifting (“BEPS”)
In addition to the requirements of TP
documentation, Multinational Enterprises (“MNE”) which meet the following
conditions are also required to submit the Combined Report of International
Transactions (“CRIT”), which is comprised of three elements (Local file, Master
file, and Country-by-Country (“CbC”) report).
and Master file
Domestic corporations and foreign corporations with a domestic place of
business that satisfy the following criteria:
sales of an individual entity exceed KRW100 billion; and
specially related party transaction exceeds KRW 50 billion.
In the case where the ultimate parent company is a domestic company or
a resident of Korea, the CbC reporting obligator is the domestic parent
company preparing the consolidated financial statements of a multinational
group whose consolidated revenue exceeds KRW1 trillion during the preceding
In the case where the ultimate parent company is a foreign company or a
non-resident of Korea, the CbC reporting obligator is a Korean affiliated
company of a multinational group whose consolidated revenue exceeds 750
million Euros (or equivalent) in the preceding fiscal year if any of the following
conditions are met:
There is no
obligation to submit a CbC report under the laws and regulations of the
country where the ultimate parent company is located; OR
There is no
arrangement for the exchange of CbC report information between South Korea
and the country where the ultimate parent company is located; OR
affiliated company did not submit CbC Reporting Notification within 6 months
from the end of each fiscal year (e.g. by June 30, 2020 for the Korean
company having the fiscal year ended December 31, 2019).
Within 12 months from the end of each fiscal year (e.g. by December 31, 2020 for the MNE having
the fiscal year ended December 31, 2019).
In the case where the threshold condition of Local file,
Master file, and CbC report is satisfied, MNE failing to submit such reports
(in whole or in part) or found to have submitted incorrect information may be
subject to penalties up to KRW 30 million per report.