South Korea has implemented various tax changes as part of the 2024 tax reform measures passed by the parliament in late 2023. The main tax measures are:
- The global minimum tax (GloBE) rules have been amended, with the undertaxed payment/profit rule (UTPR) effective date being deferred to 1 January 2025 from 1 January 2024. However, the effective date of the primary income inclusion rule (IIR) will remain on schedule on 1 January 2024. These amendments will incorporate adjustments based on OECD administrative guidance.
- A 3% tax credit for investments in foreign natural resource development has been introduced. The investments encompass mining rights acquisition, investments in foreign companies for mining rights, and direct foreign investments in a foreign subsidiary by a domestic resident.
- The special tax relief period for technology transfers and licensing income generated by SMEs has been extended to 31 December 2026. This also includes:
- a 50% tax reduction for income derived from technology transfers like patent rights;
- a 10% deduction for acquired technology (5% if not an SME);
- a 25% tax deduction for income derived from technology licensing.
- Introducing a provision to specify that a foreign tax credit can be claimed for the surplus foreign tax paid in Russia following the suspension of the Korea-Russia tax treaty.
- A proposal to amend the deadline for submitting the Local and Master file from 12 months post fiscal year end to 6 months after, but this change was not approved.
