l Reporting requirements of transfer pricing (“TP”) documentation
A company including a foreign-invested company must submit the following TP documents together with its annual corporate income tax return within 3 months from the end of each fiscal year to the tax authorities:
Report on the method of arm's length price determination
Schedules of international transactions with Overseas Specially Related Parties ("OSRP")
Summarized Profit and Loss Statements of OSRP
A company may omit submission of the “Report on the Method of Arm’s Length Price Determination”, if the company meets one of the following conditions:
goods transactions (including both sales and purchase transactions) with its OSRP must not exceed KRW 5 billion in total AND service transactions (including both services rendered and received) with its OSRP must not exceed KRW 1 billion in total; or
goods transactions (including both sales and purchase transactions) with its each OSRP must not exceed KRW 1 billion AND service transactions (including both services rendered and received) with its each OSRP must not exceed KRW 200 million.
Also, a company may omit submission of the “Summarized Profit and Loss Statement of OSRP”, if goods transactions (including both sales and purchase transactions) with its concerned OSRP does not exceed KRW 1 billion AND service transactions (including both services rendered and received) with its concerned OSRP does not exceed KRW 200 million.
If a company does not submit the reports explained above within the filing due date and fails to submit the reports upon request of the tax authorities, a penalty up to KRW 100 million may be assessed.