SOUTH KOREA Law and Practice Contributed by: Je-Heum Baik, Chang Hee Lee, Maria Chang and Min Kim, Shin & Kim
7.2 Exchange of Information Clauses in Tax Agreements Korea is a highly active participant in the global net - work of tax information exchange, utilising a sophis - ticated framework to identify offshore tax evasion and ensure compliance. As of 2026, the NTS leverages four primary methods of exchange, primarily ground - ed in the LCITA and the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The most systematic of these is the AEOI, which involves the annual transmission of predefined data sets with - out a specific prior request. This includes the CRS covering financial account information with over 120 jurisdictions, reciprocal FATCA reporting with the Unit - ed States, and CbC reporting for large multinationals. Notably, as of 1 January 2026, Korea has expanded this reach by implementing the Crypto-Asset Report - ing Framework to automatically exchange data on virtual asset transactions. 7.3 Other Forms of International Tax Collaboration Korea is not yet a participant in the OECD’s Interna - tional Compliance Assurance Programme. 8. Mutual Agreement Procedures and Arbitration 8.1 Availability and Legal Basis Korea maintains a robust MAP programme, serving as a non-judicial administrative process designed to resolve tax disputes stemming from the interpretation or application of tax treaties. This programme is par - ticularly critical for addressing cases of double taxa - tion or transfer pricing adjustments. As of 2026, the MAP framework is highly active, with the NTS issuing updated annual guidelines to further streamline the resolution of complex international tax conflicts. The legal authority for the MAP programme in Korea is anchored in two primary sources. First, the LCITA serves as the foundational domestic legislation, spe - cifically within Articles 42 to 46 and their correspond - ing Enforcement Decrees, which codify the technical procedures for commencing, conducting and imple - menting MAP outcomes. Second, Korea’s extensive network of over 95 bilateral double taxation agree -
ments provides the international legal basis. These treaties typically incorporate provisions modelled after Article 25 of the OECD Model Tax Convention, authorising the “Competent Authorities” of both states – usually the Ministry of Economy and Finance or the NTS – to communicate directly to resolve treaty-relat - ed grievances. 8.2 Application Deadlines The deadline to submit a MAP request is typically three years from the date when the taxpayer becomes aware of the tax assessment. This date generally refers to the day on which the taxpayer receives a tax assessment notice. 8.3 Mandatory Binding Arbitration Mandatory binding arbitration is not universally avail - able for all tax matters, but it has increasingly become a standard feature in many of the country’s modern and recently renegotiated tax treaties. As of 2026, the availability of this mechanism is governed by three distinct legal frameworks, starting with the MLI. While Korea has ratified the MLI, it notably opted out of the mandatory binding arbitration provisions in Part VI. Consequently, Korea does not automatically apply mandatory arbitration to its vast network of over 95 treaties through the MLI, instead maintaining the tra - ditional “Mutual Agreement” standard where jurisdic - tions are required to endeavour to reach a resolution without being strictly forced to do so by an external arbiter. Korea maintains a highly active and well-established APA programme, which serves as a primary tool for multinational enterprises to manage transfer pric - ing risks and secure up-front tax certainty. The pro - gramme is administered by the NTS and functions through a framework grounded in both domestic leg - islation and international treaties. The foundational domestic statute is the LCITA, specifically Articles 14 and 15, which authorise taxpayers to seek prior approval for their chosen transfer pricing methodolo - gies. This is supported by the Enforcement Decree of the LCITA, which outlines the technical requirements 9. Dispute Prevention 9.1 Advance Pricing Agreements
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