Korea: Further proposed amendments to Pillar Two rules
The Ministry of Economy and Finance announced further proposed amendments to the Korean Pillar Two global anti-base erosion minimum tax rules.
The Ministry of Economy and Finance (MOEF) on July 25, 2024, announced further proposed amendments to the Korean Pillar Two global anti-base erosion (GloBE) minimum tax rules.
The proposed amendments relate to items from the OECD GloBE model rules/commentary and previously announced administrative guidance not yet incorporated in the Korean GloBE rules. In particular, the proposed amendments:
- Introduce the undertaxed payments rule (UTPR) safe harbor, permanent safe harbor, and GloBE loss election
- Clarify the definition of permanent establishment, partially-owned intermediate parent entity, and the flow-through entity in line with the OECD model rules/commentary
- Supplement existing rules such as the allocation methods for the top-up tax under the UTPR and the exceptions to de minimis rules
Next steps
The proposed amendments will be submitted to the National Assembly for approval in September and are expected to be finalized by the end of year. Detailed guidance under the proposed amendments is also expected to be released later in the year.
Read an August 2024 report prepared by the KPMG member firm in Korea