Introduction of global minimum tax rules

• The global minimum tax rules will become effective from 2024 in line with the OECD’s Pillar Two for the purpose of preventing tax avoidance by multinational enterprise groups (“MNE groups”) in the digital economy.

• This regulation will apply to MNE groups whose consolidated revenue is EUR 750 million or more in two or more of the last four (4) fiscal years.

• In case an MNE group which is subject to the global minimum tax rule is liable for taxes at an effective tax rate (Adjusted tax / Adjusted income) of below the minimum tax rate (15%) in a particular jurisdiction, member firms of the MNE group in Korea may be liable to pay additional corporate income tax for the difference between 15% (the minimum tax rate) and the effective tax rate applied in a particular jurisdiction as follows.

- Adjusted tax: Total tax amount calculated based on the accounting corporate income tax expense of each member firm

- Adjusted income: Total net income reflecting adjustments to the accounting net income of each member firm

- Additional tax to be paid: (Minimum tax rate – effective tax rate of each jurisdiction) x tax base (adjusted income – 5% of the total amount of tangible assets and wages)

• The filing due date would be 15 months after the last day of the fiscal year. However, for the first year, the due date would be 18 months after the last day of the fiscal year (i.e., June 30, 2026, for a company whose fiscal year ends in December 2024).