Pillar Two in South Korea
South Korea has implemented OECD Pillar Two through Chapter 5 of the Adjustment of International Taxes Act (국제조세조정에 관한 법률). Three rules — the Income Inclusion Rule (IIR), the Undertaxed Profits Rule (UTPR), and the Domestic Top-up Tax (Korea's QDMTT, locally named "내국추가세") — apply on a phased basis. Effective dates below apply to fiscal years beginning on or after the dates shown.
Implementation Timeline
Each rule applies to fiscal years beginning on or after the date shown.
Quick reference
| Rule | Effective date | Status |
|---|---|---|
| IIR — Income Inclusion Rule | Fiscal years beginning on or after 2024-01-01 | In force OECD qualified |
| UTPR — Undertaxed Profits Rule | Fiscal years beginning on or after 2025-01-01 | In force OECD review pending |
| QDMTT — Qualified Domestic Minimum Top-up Tax Local name: 내국추가세 (Domestic Top-up Tax) | Fiscal years beginning on or after 2026-01-01 | Newly in force OECD review pending |
| QDMTT Safe Harbour | Available alongside the QDMTT | Case-by-case |
Implementing legislation
- 국제조세조정에 관한 법률 — Chapter 5 (Adjustment of International Taxes Act, Chapter 5 — Global Minimum Tax)
- Article 72: Income Inclusion Rule (IIR) — applies to fiscal years beginning on or after 2024-01-01
- Related provisions within Chapter 5: Undertaxed Profits Rule (UTPR) — originally scheduled for 2024-01-01, deferred by one year through the December 2023 amendment to apply from 2025-01-01
- Related provisions within Chapter 5: Domestic Top-up Tax (내국추가세) — added through the December 2025 amendment; applies to fiscal years beginning on or after 2026-01-01
Practical implications
MNE groups parented in Korea are subject to the IIR for fiscal years beginning on or after 2024-01-01. Where a subsidiary's jurisdictional effective tax rate (ETR) falls below 15%, top-up tax is computed and paid in Korea (as the jurisdiction of the parent entities), and the group must also file the GloBE Information Return (GIR).
MNE groups with constituent entities in Korea become subject to Korea's Domestic Top-up Tax (내국추가세) for fiscal years beginning on or after 2026-01-01. Where the QDMTT Safe Harbour conditions are met, the IIR/UTPR computation at the parent jurisdictions may be exempted, reducing the burden of dual computation.
Recent legislative developments
- December 2025: Amendment to the Adjustment of International Taxes Act introducing the Domestic Top-up Tax (effective 2026-01-01)
- 2024-07-25: Ministry of Economy and Finance — Tax Reform proposals announced, signalling additional Safe Harbour provisions to be introduced
- 2023-12-21: UTPR effective date deferred by one year (from 2024 to 2025-01-01)
- 2022-12-23: Chapter 5 (Global Minimum Tax) added to the Adjustment of International Taxes Act
Related terms
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- OECD Inclusive Framework — Updated Central Record for Purposes of the Global Minimum Tax, approved 2026-05-11 (current as at 2026-05-01). OECD Global Minimum Tax
- Korea Law Information Center (국가법령정보센터) — Adjustment of International Taxes Act. law.go.kr
- Korean Ministry of Economy and Finance (재정경제부) — Tax reform announcements
Disclaimer
This page is reference information prepared as of 2026-05-28 by synthesising the primary sources listed above, and is not legal or tax advice. Before applying any of this material in practice, please:
- Verify the latest legislation, administrative guidance, and National Tax Service notices
- Obtain review by a qualified Pillar Two specialist
- Reassess applicability against the specific facts and circumstances of the group
Translation note. The authoritative version of this page is the Korean original (국가별 현황 › 대한민국). This English version is provided for accessibility and may not capture every nuance of Korean legal terminology. Where precision matters, please refer to the Korean original or to the source legislation in its original language.