SOUTH KOREA Law and Practice Contributed by: Steve M Kim, Philje Cho, Gijin Hong and Kyu Bin Kang, Lee & Ko
In the case of filing an amended tax return, the con - firmation must be submitted within 90 days from the filing date. In the case of a tax assessment by the Korean tax authorities as a result of a tax audit, the taxpayer receives a Notice of Temporary Second - ary Adjustment (NTSA), which indicates that the TP adjustment amount is temporarily reserved until it is confirmed whether the adjusted income will be repat - riated. The taxpayer then has 90 days from the date of receipt of the NTSA to submit the Confirmation of Return of Transfer Pricing Adjustment. If the taxpayer fails to submit such confirmation within 90 days, a secondary adjustment will occur upon the reversal of the temporarily reserved amount, treating the amount as either a deemed dividend to its foreign related party or a deemed contributed capital in the case of its for - eign subsidiary. The Confirmation of Return of Transfer Pricing Adjust - ment must be accompanied by a remittance state - ment proving the actual return of the amount by the foreign related party. The repatriated amount must also include interest, which is calculated by applying the prescribed benchmark interest rate for each cur - rency (ie, SOFR for US dollar, etc) per the LCITA to the period from the day following the end of the fiscal year in which the controlled transaction date falls until the return date. 6. Cross-Border Information Sharing 6.1 Sharing Taxpayer Information As of the end of November 2025, South Korea has signed 97 tax treaties (up from 95 the previous year due to a recently sealed tax treaty with Rwanda and Andorra) and 12 “tax information exchange agree - ments”. South Korea is also one of 150 signatories to the Convention on Mutual Administrative Assistance in Tax Matters. The exchange of more TP-specific information with other taxing authorities is facilitated by the Multilateral Competent Authority Agreement, which allows signa - tories to exchange CbC reporting. South Korea is one of 113 signatories, and has also separately signed a CbC reporting exchange agreement with the USA,
based on the existing tax information exchange agree - ment with the USA. 6.2 Joint Audits As noted previously, South Korea is one of signato - ries to the Convention on Mutual Administrative Assis - tance in Tax Matters. Under Article 8 (Simultaneous Tax Examinations) and Article 9 (Tax Examinations Abroad), tax authorities of participating states may co-ordinate to conduct specific tax audits simultane - ously or exchange all relevant information obtained through such audits. Additionally, participating states may request to take part in appropriate aspects of an ongoing tax audit conducted in another contracting state. 6.3 Simultaneous Controls Article 39 of the LCITA provides that, where the NTS deems a tax audit necessary with respect to transac - tions involving a person to whom a tax treaty applies, the NTS may conduct a simultaneous tax audit with the tax authority of the treaty partner jurisdiction, or dispatch tax officials to the treaty partner jurisdic - tion to directly conduct a tax audit or participate in a tax audit conducted by the tax authority of the treaty partner jurisdiction. In addition, pursuant to the NTS’s internal guidelines – namely the Rules on the Han - dling of Tax Audit Affairs – the procedures and scope of simultaneous tax audits are strictly managed, and matters necessary for tax audit co-operation (eg, the procedures, methods and scope of such co-opera - tion) are carried out based on agreements with the competent authorities. 6.4 International Compliance Assessment Programme (ICAP) Korea has not participated in any phase of the OECD’s International Compliance Assurance Programme (ICAP), including Pilot Phase 1 (2018), Pilot Phase 2 (2019) or the subsequent full programme launched in 2021. Korea is therefore not currently listed among the participating tax administrations under ICAP. Although Korea is not included in the OECD’s publicly disclosed list of participating tax administrations, it has actively participated in international discussions on ICAP. In particular, Korea has attended OECD Commissioner- level meetings addressing issues such as taxation of the digital economy and the digitalisation of tax
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