l 2020 Annual Corporate Income Tax Return and
Local Income Tax Return Filing Deadlines
Under the Corporate Income Tax Law (CITL), a company having a fiscal year
ended December 31, 2020 should file the FY2020 annual corporate income tax
return by March 31, 2021 together with necessary tax payments.
In this connection, we summarized the due dates of tax return filing and
necessary tax payment related to corporate income tax and local income tax as
In principle, annual/interim corporate income tax and local income tax
returns are due filing together with tax payment as given below:
corporate income tax return
- Within 3 months from the fiscal
corporate income tax return
- Within 2 months after the first 6
months of each fiscal year
local income tax return
Within 4 months after the fiscal year-end
If the annual/interim corporate income taxes payable are over Won 10
million, companies are allowed to make tax payments in 2 installments as below.
1st installment (*)
- Within 3 months from the fiscal year-end
2nd installment (*)
- Within 1 month from the end of the filing
due date (within 2 months for a small and medium-sized company)
- Within 2 months from the end of interim
The amount of installments shall be determined as follows:
total taxes payable is:
payments can be
down as below:
Won 10 million
up to 20 million
over 10 million
Won 20 million
or more of taxes payable
(**) Installment payment is not applicable for local income tax.
l Transfer Pricing (TP) and BEPS Requirements
Under the International Tax Coordination Law (ITCL), which governs the
taxation of international transactions between taxpayers and overseas specially
related parties (OSRP), a company is obliged to submit the following documents
for the transactions made with its OSRPs during the fiscal year to the relevant
tax office within 6 months from the fiscal year end:
“Schedules of International Transactions”
“Report on Arm’s Length Price
“Summarized Profit and Loss
Statement of OSRP”
In addition, 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 CbC report).
and Master file
corporations and foreign corporations with a domestic place of business that
satisfy the following criteria:
sales of an individual entity exceed KRW100 billion; and
related party transaction exceeds KRW 50 billion per year.
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 fiscal year.
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. However, if both of the following
conditions are met, submission of the Notification of CbC reporting obligator
can substitute the CbC reporting obligation of the Korean affiliated company
of a multinational group :
There is an
obligation to submit a CbC report under the laws and regulations of the
country where the ultimate parent company is located at; and
b. There is an arrangement for the exchange of CbC report information
between Korea and the country where the ultimate parent company is located.
Within 12 months from the end of each fiscal year
Within 12 months from the end of each fiscal year (within 6 months from the end of
each fiscal year in case of submitting the Notification of CbC report
l 2020 Individual Income Tax Return Filing
Deadline (due by May 31, 2021)
Residents, regardless of
their nationalities, are subject to Korean income tax based on worldwide income
including global income (employment income, business profits, dividend,
pension, interest, rental, and other miscellaneous income), severance pay and
However, under the revised Individual Income Tax Law (IITL), in the case
where the period that a foreigner, who is a tax resident of Korea, has his
address or abode in Korea does not exceed 5 years in aggregate during the past
10 years from the end of the concerned tax year, his/her foreign source income
earned from January 1, 2009 shall be taxed in Korea only if such income is
paid in Korea or such income is remitted into Korea.
Taxpayers making monthly
tax payments and having only one source of worldwide income (i.e., either Class
A or Class B) are generally not required to file a global income tax return
since the employer (for Class A income earners) or the Class B taxpayers'
association (for Class B income earners) finalizes the individual's tax
liability at the end of the year for and on behalf of the employee concerned.
Taxpayers having more than one source of income, however, are required to file
a global income tax return for the year and pay taxes due on such income on or
before May 31 of the following year, or prior to permanently leaving Korea.
The filing of 2020 annual individual income tax return is coming due on May 31, 2021 together with necessary tax payments.