South Korea Opens First Global Minimum Tax Filings for 2,547 Multinational Groups

More than 10,000 Korean entities face a June deadline

South Korea's National Tax Service (NTS) will begin accepting the country's first global minimum corporate tax filings on May 1, 2026. The agency has sent guidance to 10,188 domestic entities belonging to 2,547 multinational enterprise groups, setting up a substantial compliance exercise ahead of the June 30 deadline.

The filing period covers fiscal year 2024, the first year subject to rules South Korea enacted in December 2022. Companies within the system must submit the required information and pay any additional tax owed during the window. The aim is to bring the effective tax rate on covered multinational profits to at least 15 percent.

Major Korean conglomerates and foreign groups such as Google and Apple fall within the scope of the regime when they meet its revenue requirements. A group's ultimate parent can be based in Seoul, Silicon Valley or another jurisdiction: the location of its headquarters does not, by itself, remove the filing obligation for its Korean entities.

South Korea is the first jurisdiction to fully operationalize the rules, placing its tax administration at the front of an international effort to limit competition through very low corporate tax rates. The immediate task for businesses is practical: determine whether their group qualifies, assemble information across its operations and calculate whether tax already paid falls short of the minimum.

The system follows the Organization for Economic Cooperation and Development's (OECD) Base Erosion and Profit Shifting 2.0 Pillar Two framework, approved by 143 countries. It changes where additional tax can be collected when a multinational earns income in a jurisdiction with an effective tax rate below 15 percent.

For businesses, the June deadline therefore combines two responsibilities: explaining their calculations to the tax authority and paying any resulting liability. A group can have a reporting obligation even when its calculations produce no additional payment.

Which businesses must file?

The revenue test applies to the multinational group as a whole. A group qualifies if its consolidated annual revenue reached at least 750 million euros, approximately 1.1 trillion to 1.3 trillion Korean won, in at least two of the four preceding fiscal years. Consolidated revenue means the revenue reported for the group together, rather than the sales of a single Korean subsidiary.

For fiscal year 2024, the relevant earlier years are 2020 through 2023. Looking across four years means that eligibility depends on a group's revenue history, rather than one unusually strong or weak year.

The NTS has identified 2,547 groups and 10,188 constituent entities in Korea for the inaugural filing exercise. A constituent entity is an individual business or other covered unit within a multinational group. The number of entities is therefore much larger than the number of groups because one group can have several operations in Korea.

Korean subsidiaries must meet local filing requirements even when their ultimate parent is in a country that has not implemented the global minimum tax. Government entities, international organizations, nonprofit organizations and pension funds are exempt.

How the 15 percent floor works

The global minimum tax uses the GloBE Rules, short for Global Anti-Base Erosion. These rules compare the income and covered taxes of a multinational's operations within a jurisdiction to calculate an effective tax rate. If that rate is below 15 percent, an additional payment, called top up tax, can become due.

An effective tax rate describes the tax paid relative to the income used in the calculation. It differs from a country's headline corporate tax rate, which is the rate written into its tax law. The calculations therefore require more than checking a published national rate.

The framework allows the shortfall to be collected in the jurisdiction where the subsidiary operates or in the parent company's home jurisdiction. Two connected mechanisms determine how the obligation moves through a corporate group: the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR).

The IIR requires a Korean ultimate parent entity to pay top up tax on subsidiaries' profits in jurisdictions where the effective rate falls below 15 percent. If the ultimate parent's home country does not apply an IIR, responsibility can move to an intermediate parent entity or a partially owned parent entity within the corporate chain.

The UTPR acts as a backstop. It allows countries where the multinational operates to collect top up tax when the parent jurisdiction fails to enforce the IIR. Together, the rules reduce the advantage of placing profits in a country that charges little or no tax.

A simplified example shows the arithmetic. A Korean conglomerate has a subsidiary in Country A earning 10 billion won and paying no tax. It also has a branch in Country B earning 20 billion won and paying 1 billion won in tax, an effective rate of 5 percent.

Country A's income produces a top up tax of 1.5 billion won, equal to 15 percent of 10 billion won. Country B requires another 2 billion won, calculated by applying the gap of 10 percentage points between 5 percent and 15 percent to its 20 billion won of income. The conglomerate pays the Korean NTS a combined 3.5 billion won in this example.

The dates businesses need to track

South Korea's first filing deadline follows several years of legislation and preparation. The original rules were enacted in December 2022, while later amendments changed aspects of the calculations and introduced transitional relief.

The main dates are:

• December 2022: South Korea enacted its global minimum tax rules.
• Fiscal year 2024: The period covered by the first filing round, with eligibility assessed using revenue from 2020 through 2023.
• December 31, 2024: Law No. 20612 introduced amendments effective for fiscal years beginning on or after January 1, 2025.
• March and April 2026: The NTS conducted support work before filing opened.
• May 1, 2026: The first filing window opens.
• May 8, 2026: A briefing for companies and tax agents is scheduled.
• June 30, 2026: The first filing window closes, with returns and any top up tax payments due.

Companies must connect these dates to the correct fiscal year. The June 2026 deadline concerns the first returns for 2024, while the legislative amendments generally apply to fiscal years beginning on or after January 1, 2025.

What the 2025 amendments change

Law No. 20612, enacted on December 31, 2024, adjusts loss treatment, UTPR calculations and filing deadlines. The changes incorporate continuing OECD administrative guidance, including updates issued in December 2023.

Article 67(4) introduces an election for losses. Instead of calculating total deferred tax adjustments, constituent entities can apply 15 percent of GloBE losses as a deferred tax asset on a jurisdictional basis. A deferred tax asset records a tax benefit that can be used in later calculations.

The election must be made in the first fiscal year and then continues automatically in subsequent years. Companies choosing it therefore need to consider how their initial decision carries into later reporting periods.

Article 80 introduces the Transitional UTPR Safe Harbour. Under this provision, the UTPR top up tax amount is treated as zero when the jurisdiction of the ultimate parent entity has a corporate income tax rate of at least 20 percent. A safe harbor is a rule that gives qualifying businesses specified relief from the normal calculation or payment requirements.

This relief applies to fiscal years beginning on or before December 31, 2025, and ending before December 31, 2026. Its timing and the 20 percent threshold matter because it is a temporary provision tied to particular fiscal years.

The amendments also clarify how UTPR top up tax is allocated. Article 83 extends the deadline for the GloBE Information Return to June 30, 2026, whenever the standard filing date would fall before that date. These measures combine changes to the tax calculation with extra time for the first reporting exercise.

Why the information return is demanding

The GloBE Information Return requires a detailed view of a multinational group. Companies must report organizational structure, stock compensation, pension expenses and numerous elections that can affect calculations across their operations.

Tax departments also have to reconcile financial accounting with tax accounting. Financial accounts determine GloBE income, while tax accounting determines covered taxes. Differences between those systems must be identified so that the effective tax rate is calculated consistently.

For US multinationals, the work includes coordinating the new calculations with foreign tax credit systems, Subpart F income and the Global Intangible Low-Taxed Income (GILTI) regime. These are existing parts of the US approach to taxing foreign income, adding further calculations to an already demanding process.

Companies need consistent and comprehensive information within tight timeframes that also align with quarterly tax provisioning. Tax provisioning is the process of estimating and recording tax expenses in financial accounts, often before a final return is filed.

Tax professionals have stressed the need for a single reliable source of data. In practice, this means bringing information together from enterprise resource planning (ERP) systems, spreadsheets and email records, rather than leaving different teams to work from disconnected versions.

Automated workflows and specialized calculation engines can help manage that workload. Without them, even sophisticated tax departments face the challenge of checking large volumes of information from multiple jurisdictions and accounting systems before the filing deadline.

The US arrangement creates a different route

South Korea's implementation sits alongside a different arrangement for American multinationals. At the June 2025 G7 summit in Banff, Canada, finance ministers reached a compromise that effectively exempts multinational corporations based in the United States from Pillar Two enforcement by other countries.

US Treasury Secretary Scott Bessent helped negotiate the arrangement. It was part of a deal to drop proposed revenge tax provisions from US legislation that would have penalized foreign companies operating in America.

The carve out gives American groups a different position from Korean and European multinationals facing the full compliance framework. American competitors may escape the 15 percent minimum through the substance-based income exclusion and other loopholes. That exclusion removes a portion of income associated with business substance from the top up tax calculation.

Corporate headquarters therefore influence how the international rules apply, even as Korean subsidiaries remain subject to local filing requirements. The administrative duty to file in Korea and the treatment of a group's tax liability under an international arrangement are separate parts of the same compliance exercise.

Vietnam has also implemented its own Decree 236, applying it retroactively from fiscal year 2024. Across Asia, companies must work through national versions of the minimum tax that vary slightly, rather than relying on one identical filing process everywhere.

Low tax jurisdictions face changing incentives

The 15 percent floor changes the appeal of jurisdictions such as the Cayman Islands and Bermuda, where effective tax rates near zero have attracted multinational activity. When a low local tax bill generates an additional payment elsewhere, the group's saving becomes smaller.

OECD data put the earlier effective tax rates in investment hub countries as low as 1.6 percent. Those countries hosted foreign direct investment exceeding 150 percent of gross domestic product. Foreign direct investment measures investment across borders, while gross domestic product measures the value of economic production within a country.

The gap between a 1.6 percent effective rate and the new 15 percent floor is 13.4 percentage points. That comparison shows the size of the change facing groups that previously benefited from the lowest rates, although each group's liability depends on its own calculations.

Ireland has increased its corporate tax rate to 15 percent, and Bermuda has introduced corporate taxation. Singapore and other financial centers are also following the move toward the minimum tax framework.

These changes reduce the advantage of shifting intangible assets, such as intellectual property, to corporate shells in the Caribbean. Such arrangements previously allowed multinationals to legally avoid billions in taxes. British journalist Nicholas Shaxson described in his book Treasure Islands how these jurisdictions helped companies circumvent the rules of other nations.

The minimum tax changes that calculation by allowing another jurisdiction to collect the shortfall. Low tax locations face pressure to reform because keeping their own rate near zero can leave the additional revenue to a country elsewhere in the corporate group.

NTS support comes with penalties

The National Tax Service has distributed detailed guidance in Korean and English, including the 2024 Global Minimum Tax Filing Guide. Foreign invested companies are a particular focus during the inaugural filing period, when businesses must translate the new rules into jurisdictional calculations and returns.

The agency's May 8 briefing for companies and tax agents will cover procedural fundamentals and concerns raised by businesses. Its support also includes itemized checklists and resources tailored to different taxpayer categories, building on assistance conducted in March and April.

The NTS, South Korea's national tax administration, set out its commitment to helping companies comply in an official press release:

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.

Penalties for false returns or failure to submit the GloBE Information Return can reach 100 million Korean won. During the transition period, however, the NTS has indicated that fines may be waived when companies fully disclose their computation methodologies.

Late payment penalties apply when top up tax payments fall short. Those penalties are reduced by 50 percent during the initial implementation phase. The transitional relief therefore sits alongside continuing obligations to calculate, disclose and pay the tax correctly.

The June 30 deadline is the immediate focus for the 2,547 groups identified by the NTS. Their first submissions will bring together the revenue test, international tax calculations and detailed group information required under South Korea's new system.

The Bottom Line

• South Korea's first global minimum tax filing window runs from May 1 to June 30, 2026, covering fiscal year 2024.
• The NTS has sent guidance to 10,188 Korean entities belonging to 2,547 multinational groups.
• The revenue threshold is at least 750 million euros in two of the four preceding fiscal years.
• The framework uses the IIR and UTPR to collect additional tax when covered effective rates fall below 15 percent.
• Law No. 20612 changes loss treatment, introduces temporary UTPR relief and extends certain filing deadlines to June 30, 2026.
• A June 2025 G7 arrangement gives multinationals based in the United States different treatment under Pillar Two enforcement.
• The NTS will hold a briefing on May 8, with transitional penalty relief accompanying the first compliance round.