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August 1, 2022 Korea’s 2022 tax reform proposals include new global minimum tax rules to align with OECD BEPS 2.0 Pillar Two
Executive summary Model Rules for the Global Minimum Tax (GloBE or OECD BEPS 2.0 Pillar Two) were released by the Organisation for Economic Co-operation and Development (OCED) on 20 December 2021, as approved by the Inclusive Framework on Base Erosion and Profit Shifting (BEPS). The GloBE Rules apply to Constituent Entities that are members of a Multinational Enterprise (MNE) Group that has annual revenue of €750 million or more in the Consolidated Financial Statements of the Ultimate Parent Entity (UPE) in at least two of the four Fiscal Years immediately preceding the tested Fiscal Year. In this regard, the 2022 tax reform proposals (the 2022 Proposals)1 introduce new global minimum tax rules to align with the OECD BEPS 2.0 Pillar Two. The regulation will be included in the Adjustment of International Taxes Act (AITA) and will be effective for fiscal years beginning on or after 1 January 2024. Detailed discussion Details regarding the GloBE rules in the 2022 Proposals are outlined below.
_________________________________________ For additional information with respect to this Alert, please contact the following: Ernst & Young Han Young, Seoul
Ernst & Young LLP (United States), Korean Tax Desk, New York
Ernst & Young LLP (United States), Asia Pacific Business Group, New York
Ernst & Young LLP (United States), Asia Pacific Business Group, New York
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