Go back

GloBE Information Return Korea 2026: Multinational Tax Compliance Requirements for Foreign-Owned Startups

GloBE Information Return compliance for multinational companies in Korea

Table of Contents

Open Table of Contents

Introduction: The 2026 Global Tax Compliance Shift

In 2026, multinational enterprises (MNEs) operating in Korea face a transformative tax reporting obligation: the GloBE Information Return (GIR), mandated under the OECD’s Pillar Two framework. For foreign-owned Korean subsidiaries—including venture-backed startups with international parent structures—this represents the most significant compliance change since the introduction of transfer pricing documentation.

If your Korean entity is part of a multinational group with consolidated revenues exceeding €750 million, you must file a GloBE Information Return by June 30, 2026, covering the 2024 fiscal year. Failure to comply triggers automatic penalties of up to ₩100 million per jurisdiction, plus potential exclusion from Korean tax incentive programs.

This guide provides a comprehensive breakdown of Korea’s GIR requirements, filing mechanics, common pitfalls, and strategic compliance approaches for foreign-owned businesses.

What Is the GloBE Information Return?

OECD Pillar Two: The Foundation

The Global Anti-Base Erosion (GloBE) Rules—commonly known as OECD Pillar Two—establish a 15% global minimum tax for large multinational enterprises. The framework aims to prevent profit shifting to low-tax jurisdictions by ensuring MNEs pay at least 15% tax on income in every country where they operate.

Key components:

  1. Income Inclusion Rule (IIR): Parent companies pay top-up tax if subsidiaries face effective tax rates (ETR) below 15%
  2. Undertaxed Profits Rule (UTPR): Allocates top-up tax to other jurisdictions if IIR doesn’t apply
  3. GloBE Information Return (GIR): Annual disclosure of jurisdictional tax calculations, ETRs, and top-up tax amounts

Korea’s adoption: Korea implemented Pillar Two through the Minimum Tax Act (enacted December 2023), effective for fiscal years beginning on or after January 1, 2024.

Who Must File a GIR in Korea?

Filing obligation applies if:

  1. Your group’s consolidated revenue ≥ €750M (approx. ₩1.1 trillion) in at least 2 of the prior 4 fiscal years
  2. You operate a Korean entity (subsidiary, branch, permanent establishment)
  3. Your group is subject to Pillar Two rules (ultimate parent entity in OECD member country)

Common scenarios:

Scenario 1: Venture-Backed Startup with Unicorn Parent

Scenario 2: European Corporate Spin-Out

Scenario 3: Private Equity Portfolio Company

Korea’s GIR Filing Requirements: Key Details

Filing Deadline

First GIR submission: June 30, 2026 (for fiscal year 2024)

Ongoing deadlines: 15 months after fiscal year-end

Example timeline:

Where to File

Filing authority: National Tax Service (국세청, NTS)

Submission method: Electronic filing via HomeTax portal (https://www.hometax.go.kr)

Language: GIR must be submitted in Korean (English supplementary attachments permitted for complex calculations)

Required Information

The GIR requires disclosure across 9 categories:

CategoryDescriptionData Points
1. MNE Group StructureOrganizational chart, ownership percentagesUltimate parent entity (UPE), intermediate parents, subsidiaries
2. Jurisdictional RevenueRevenue by countryKorea revenue, global revenue breakdown
3. Profit/Loss by JurisdictionPre-tax profit for each countryKorea net income, adjustments for GloBE purposes
4. Income Tax AccruedTax expense by jurisdictionKorea corporate income tax, deferred tax
5. Income Tax PaidCash taxes paidKorea tax payments, withholding taxes
6. Effective Tax Rate (ETR)GloBE ETR calculationKorea ETR = Tax Paid ÷ GloBE Income
7. Top-Up Tax CalculationIf ETR < 15%Top-up tax amount, allocation to IIR/UTPR
8. Substance-Based Income Exclusion (SBIE)Carve-outs for payroll/tangible assetsKorea employee headcount, tangible asset value
9. Transitional Safe HarborsCbCR-based or Routine Profits safe harborEligibility determination

Example: Korea Subsidiary GIR Data

Company: Korean R&D subsidiary of U.S. tech company

FY 2024 data:

GIR calculation:

  1. GloBE Income: ₩20B (adjusted for book-tax differences)
  2. Covered Taxes: ₩2.5B (₩2B paid + ₩500M deferred)
  3. Effective Tax Rate: ₩2.5B ÷ ₩20B = 12.5%
  4. Top-Up Tax Required: Yes (ETR < 15%)
  5. Substance-Based Income Exclusion:
    • Payroll carve-out: ₩12B × 5% = ₩600M
    • Tangible asset carve-out: ₩10B × 5% = ₩500M
    • Total SBIE: ₩1.1B
  6. Excess Profit Subject to Top-Up Tax: ₩20B - ₩1.1B = ₩18.9B
  7. Top-Up Tax Rate: 15% - 12.5% = 2.5%
  8. Top-Up Tax Amount: ₩18.9B × 2.5% = ₩472.5M

Outcome: U.S. parent must pay ₩472.5M top-up tax under IIR (collected in the U.S.), or Korea may collect under UTPR if IIR doesn’t apply.

Strategic Compliance Considerations

1. Who Prepares the GIR?

Common models:

Model A: Centralized (Parent-Led)

Model B: Decentralized (Local Filing)

Recommendation for Korea: Use Model A (centralized) but appoint a Korean tax representative (licensed CPA) to coordinate with NTS.

2. Data Collection Challenges

Common issues:

Issue 1: Deferred Tax Reconciliation

Korean accounting standards (K-IFRS) may differ from GloBE rules on deferred tax treatment.

Solution: Maintain a dual-ledger system:

Issue 2: Intra-Group Transactions

Royalties, management fees, and intercompany loans must be eliminated or adjusted for GloBE purposes.

Solution: Use transfer pricing documentation as a starting point, but apply GloBE-specific allocation rules.

Issue 3: Currency Conversion

GloBE calculations use functional currency (KRW for Korean entities), but UPE may report in USD/EUR.

Solution: Convert using average exchange rates for the fiscal year (as per OECD guidance).

3. Transitional Safe Harbors (2024-2026)

Korea allows transitional safe harbors that exempt certain entities from top-up tax calculations:

Safe Harbor 1: CbCR-Based Safe Harbor

Eligibility: Korean entity’s ETR > 15% based on Country-by-Country Report (CbCR) data

Benefit: No detailed GloBE calculation required (simplified filing)

Requirement: Group must already file CbCR with Korean NTS

Safe Harbor 2: Routine Profits Safe Harbor

Eligibility: Korean entity’s profit is primarily from routine activities (manufacturing, services) with ETR > 15%

Benefit: Exclude from top-up tax calculation

Limitation: Not available if Korean entity benefits from preferential tax regimes (e.g., SME tax reduction, R&D credits)

Strategic tip: If your Korean entity qualifies for a safe harbor in 2024-2025, file for it early to avoid complex GloBE calculations while systems are being built.

Penalties for Non-Compliance

Administrative Penalties

ViolationPenalty AmountNotes
Failure to file GIR₩100M per jurisdictionAutomatic (no intent required)
Late filing (1-30 days)₩20MReduced penalty for minor delays
Incomplete/inaccurate data₩50MIf material errors affect top-up tax
Refusal to cooperate with NTS audit₩200MEscalates if fraud suspected

Operational Consequences

Beyond financial penalties, non-compliance can trigger:

Real example (2025): A European automotive supplier’s Korean subsidiary missed the CbCR filing deadline. NTS suspended the company’s R&D tax credit (worth ₩300M) until compliance was restored—a 4-month delay costing ₩25M in cash flow.

Practical Steps for Foreign-Owned Korean Entities

Step 1: Determine Filing Obligation (By March 2026)

Action checklist:

Who to involve:

Step 2: Gather Required Data (April - May 2026)

Data sources:

Data CategoryKorean SourceParent Source
RevenueK-IFRS financial statementsConsolidated financials
Profit/LossNTS corporate tax filingGroup tax provision workbook
Taxes PaidNTS payment recordsCash tax reconciliation
Employees4대보험 (social insurance) recordsPayroll system
Tangible AssetsFixed asset registerConsolidation schedules

Timeline: Allocate 6-8 weeks for data collection and reconciliation.

Step 3: Calculate GloBE ETR (May 2026)

Options:

  1. DIY calculation: Use OECD’s GloBE Information Return template (Excel-based)
  2. Software solution: Deploy specialized tools (e.g., Thomson Reuters ONESOURCE, Vertex)
  3. Outsource to advisor: Hire Big 4 or specialized Korean CPA firm

Cost comparison:

Recommendation: For first filing (2026), use advisor + software hybrid to build internal capability.

Step 4: File GIR (June 2026)

Submission process:

  1. Prepare GIR XML file (follows OECD schema)
  2. Upload to HomeTax (requires Korean business registration number)
  3. Submit supporting documentation (K-IFRS financials, tax returns)
  4. Receive confirmation (NTS issues receipt within 5 business days)

Common technical issues:

Step 5: Prepare for NTS Review (July - December 2026)

NTS review process:

What NTS focuses on:

Preparation tips:

Case Study: Successful GIR Filing for Tech Startup

Company Profile

Approach

Phase 1: Assessment (January 2026)

Phase 2: Data Collection (February - March)

Phase 3: Calculation (April)

Phase 4: Filing (May 15, 2026)

Phase 5: NTS Review (June - August)

Outcome

Future Outlook: What’s Next for Korea?

2027: Domestic Minimum Top-Up Tax (DMTT)

Korea is expected to introduce a Domestic Minimum Top-Up Tax (DMTT) in 2027, which would allow Korea to collect top-up tax directly (instead of parent jurisdiction collecting under IIR).

Impact: Korean entities with ETR < 15% may owe additional tax to Korean NTS, even if parent already pays IIR.

Planning tip: If your Korean entity’s ETR is below 15%, proactively increase ETR by:

2028: UTPR Implementation

Korea will activate the Undertaxed Profits Rule (UTPR) in 2028, allowing Korea to collect top-up tax if:

Example: If a Korean subsidiary’s parent is in a non-OECD country (e.g., UAE), Korea may collect full top-up tax under UTPR.

Strategic consideration: Groups with non-OECD parent entities should consider restructuring to insert an OECD-country holding company (to avoid UTPR exposure).

Frequently Asked Questions

Q1: Does GIR apply to Korean startups with foreign investors?

Answer: Only if:

Example: A Korean startup receives $10M from Sequoia Capital. Sequoia is part of a $50B AUM fund, but each portfolio company is separate. Result: No GIR obligation (startup not consolidated into Sequoia’s group).

Q2: Can we file GIR in English?

Answer: No. NTS requires GIR submission in Korean. However, supporting schedules (Excel workbooks) may be in English with Korean summary.

Practical solution: Hire Korean tax advisor to translate and file.

Q3: What if our fiscal year doesn’t align with calendar year?

Answer: GIR is due 15 months after fiscal year-end, regardless of calendar alignment.

Example: Fiscal year = April 1, 2024 - March 31, 2025. GIR due = June 30, 2026 (15 months after March 31, 2025).

Q4: Do we need to file if our Korean entity has losses?

Answer: Yes. GIR is mandatory regardless of profitability. Even loss-making entities must report:

Q5: Can we get an extension?

Answer: NTS rarely grants extensions for GIR. Only in exceptional circumstances (e.g., natural disaster, major system failure).

Best practice: File 4-6 weeks early to avoid technical issues at deadline.

Conclusion: Proactive Compliance Is Essential

The GloBE Information Return represents a paradigm shift in multinational tax compliance. For foreign-owned Korean entities, 2026 is not a year to delay—it’s a year to:

  1. Assess your obligation (group revenue threshold, ETR analysis)
  2. Build internal systems (dual-ledger accounting, data pipelines)
  3. Engage advisors early (Korean tax experts with Pillar Two experience)
  4. File on time (June 30, 2026 deadline is non-negotiable)

The penalties for non-compliance are severe (₩100M+), but the operational disruptions—loss of tax incentives, audit scrutiny, visa complications—can be far more costly than the fines.

Korean subsidiaries that treat GIR as a strategic priority (not a compliance afterthought) will navigate 2026 smoothly and position themselves for long-term success under the evolving global tax landscape.

Need Expert Support for GloBE Compliance?

📩 Contact SMA Lawfirm for specialized guidance on Korea’s GloBE Information Return requirements. Our tax team includes former NTS officials and Big 4 alumni with deep Pillar Two expertise.

Email: sma@saemunan.com
Services:

Disclaimer: This article provides general information based on Korea’s Minimum Tax Act as of February 2026. GloBE rules are subject to ongoing OECD guidance updates and NTS administrative interpretations. Always consult qualified Korean tax professionals for your specific situation. This content does not constitute legal or tax advice.

Share this post on:
Share this post via email
Next Post
F-2-7 Points-Based Visa: Complete Guide to Korean Residency for Skilled Professionals in 2026