South Korea has published Law No. 20612 in the Official Gazette on 31 December 2024, amending the International Tax Adjustment Act, which includes several adjustments to the Global Minimum Tax provisions.
The law introduces measures aligned with the OECD’s Pillar Two GloBE Model Rules, including special treatment for losses allowing 15% of GloBE losses as deferred tax assets, guidelines for identifying consolidated revenue, special treatment for losses allowing 15% of GloBE losses as deferred tax assets, a de minimis exclusion exception, and transitional country-by-country (CbC) reporting provisions.
The Transitional UTPR Safe Harbour has been amended and now sets the UTPR Top-up Tax to zero for Ultimate Parent Entity (UPE) jurisdictions with a corporate tax rate of at least 20%. This applies to fiscal years starting before 31 December 2025 and ending before 31 December 2026.
Furthermore, the correction claim system for arm’s length price adjustments is improved to enhance the management of overseas tax sources. The basis for automatic information exchange on crypto-asset transactions is established to prevent international tax evasion. Additionally, tax exemptions from reporting overseas financial accounts are expanded.
