Korea: Amendments to Pillar Two rules enacted

The National Assembly on 21 December 2023 passed the 2023 tax reform proposal announced by the Ministry of Economy and Finance (MOEF) on 27 July 2023 —which includes amendments to the Korean Pillar Two global minimum tax rules—effective 31 December 2023.

The amendments include postponement of the effective date of the undertaxed payment rule (UTPR) to fiscal years beginning on or after 1 January 2025 and incorporation of certain elements of the OECD global anti-base erosion (GloBE) model rules and commentary not included in the original enactment of the GloBE rules, along with parts of the administrative guidance (AG) published by the OECD in February and July 2023.

In addition, MOEF on 29 December 2023 officially enacted an amendment by presidential decree relating to the GloBE rules reflecting additional details of the OECD GloBE model rules and commentary, as well as certain elements of the February and July 2023 AG. 

Next steps

It is expected that further amendments by presidential decree containing the remaining features of the February and July 2023 AG (such as the transitional UTPR safe harbor), along with the December 2023 AG, will be announced in February 2024. In addition, enforcement regulations under the GloBE rules likely will also be announced for the first time in February 2024.

Read a January 2024 report [PDF 816 KB] prepared by the KPMG member firm in Korea