S. Korea to begin 1st filing for global minimum corporate tax next month

S Korea-global minimum tax

S. Korea to begin 1st filing for global minimum corporate tax next month

By Kim Han-joo

SEOUL, April 28 (Yonhap) -- South Korea's tax authorities said Tuesday they will begin receiving filings under the new global minimum corporate tax regime from more than 2,500 multinational enterprises next month.

Qualifying companies, which include virtually all major domestic conglomerates, must complete their first filing and payment for fiscal year 2024 by June 30, with the filing period opening Friday, the National Tax Service (NTS) said.

The rule requires a minimum corporate tax rate of 15 percent for companies with more than 750 million euros (US$878 million) in annual revenue. It is designed to reduce tax competition among countries and prevent large multinational companies from avoiding taxes.

Under the rules, qualifying companies must file in South Korea regardless of whether their ultimate parent company is based domestically or abroad. Even if the parent company's home country has not implemented the global minimum tax, subsidiaries in South Korea are still required to file.

However, government entities, international organizations, nonprofit groups and pension funds are all exempt from this arrangement.

"The global minimum tax system, which marks the beginning of a new international tax order, will be supported to ensure it is implemented smoothly, and we will actively assist companies in compliance," the NTS said in a press release.

The latest rule aligns with the Organization for Economic Cooperation and Development's Base Erosion and Profit Shifting 2.0 Pillar Two, which was approved by 143 countries.

The National Tax Service (NTS) (Yonhap)