International Transaction Reporting Requirements in Korea: What Foreign Companies Must File

Executive summary

Any taxpayer — Korean corporation or the Korean place of business of a foreign corporation — that conducts international transactions with a foreign related party is subject to a set of recurring filing obligations under Korea's International Tax Adjustment Act (국제조세조정에 관한 법률). These range from a basic international transaction statement to full transfer pricing documentation, and in some cases a country-by-country report.

The filings themselves aren't complicated individually, but the exemption thresholds differ from form to form, the deadlines fall on different dates, and the penalties for getting any of it wrong are largely mechanical — triggered by the fact of non-submission rather than by any judgment call. This guide lays out what needs to be filed, when, by whom, and what's at stake if it isn't.

Who should read this

• Korean subsidiaries and branches of multinational groups
• In-house tax managers responsible for annual transfer pricing compliance
• CFOs budgeting for year-end and mid-year filing cycles
• Legal and tax counsel advising on cross-border related-party transactions

The short answer

A taxpayer with international transactions involving a foreign related party generally files, within 6 months of the month-end following fiscal year-end:

• An International Transaction Statement (국제거래명세서)
• A Summary Income Statement of the Foreign Related Party (국외특수관계인 요약손익계산서)
• An Arm's-Length Pricing Method Report — filed separately for services, intangibles, or other transactions
• A Cost Contribution Adjustment Statement (if the company participates in a cost-sharing arrangement for jointly developed intangibles) — filed at the time of the tax return

Larger groups additionally file an Integrated International Transaction Information Report (local file / master file, and a country-by-country report for the largest multinational groups) within 12 months of fiscal year-end.

Each filing has its own exemption threshold based on transaction size — smaller companies below the relevant thresholds are not required to file.

Quick comparison

Understanding the filings

1. International Transaction Statement (국제거래명세서)

The base-level filing required of any taxpayer with international transactions with a foreign related party. Where transactions with a single related party can't fit on one form, multiple pages are used with a sequence number in the top-right margin. All amounts are stated in Korean won. Companies with guarantee-fee service transactions must additionally complete a separate guarantee transaction schedule.

Exemption threshold: aggregate goods transactions with the related party of KRW 500 million or less, service transactions of KRW 100 million or less, and intangible asset transactions of KRW 100 million or less.

2. Summary Income Statement of the Foreign Related Party

A summarized profit-and-loss statement for the foreign related party counterparty. The "fiscal year" field should reflect the most recent fiscal year for which the related party has finalized its own accounts, as of the taxpayer's own settlement date — not necessarily the taxpayer's own fiscal year.

Exemption threshold: aggregate goods transactions of KRW 1 billion or less, service transactions of KRW 200 million or less, and intangible transactions of KRW 200 million or less — or, alternatively, exemption applies if the taxpayer files a local-file style entity report along with the related overseas subsidiary financial statements.

3. Arm's-Length Pricing Method Report

Filed separately depending on the nature of the transaction:

• Services transactions — describing the pricing method applied and the reasoning for it, distinguishing services provided/received as "specific services" versus "shared services," and whether fees were charged on a direct or indirect basis
• Intangible asset transactions — filed on a separate sheet for each related party or intangible asset where different pricing methods were applied
• Other transactions (excluding services and intangibles) — the general-purpose version of this report

In all three variants, the underlying documentation supporting the chosen pricing method must be retained at the time of the corporate tax filing and made available on request.

Exemption thresholds mirror the goods/services/intangibles tiers noted above, applied per related party or in aggregate depending on the variant.

4. Cost Contribution Adjustment Statement

Required of companies that have entered into a cost-sharing arrangement with a foreign related party to jointly develop or acquire an intangible asset. The "normal" contribution amount is calculated by allocating costs based on the benefit each participant is expected to receive from the resulting intangible asset — benchmarked against what would apply in an arrangement with an unrelated party. This filing is submitted alongside the tax return itself, not on the 6-month international-transaction-filing schedule.

5. Integrated International Transaction Information Report

This is Korea's local file / master file / country-by-country reporting layer, reserved for larger groups:

• Individual entity report / integrated (master) report — required where the taxpayer's related-party transaction total for the year exceeds KRW 50 billion and revenue exceeds KRW 100 billion
• Country-by-country report — required of the Korean ultimate parent of a multinational group whose prior-year consolidated revenue exceeded KRW 1 trillion

Deadline: 12 months from the month-end following fiscal year-end — double the 6-month window for the standard filings above.

Practical insight: when the threshold is ambiguous, filing is often the safer call

A recurring scenario in practice: a foreign head office sends funds to its Korean branch, and those funds run through a capital account before ever appearing on the branch's income statement. Even though nothing shows up in P&L, this kind of head-office funding is still treated as an international transaction subject to the international transaction statement filing requirement — the transaction doesn't need to hit revenue or expense to count.

Companies sometimes hesitate to disclose this kind of intra-group funding on the statement, out of reluctance to make the flow fully transparent to the tax authority. In practice, that reluctance tends to backfire. These transactions routinely surface anyway — through a VAT filing, a tax audit, or some other unrelated review — and once the authority discovers a transaction that should have been reported, the fact that prior years' filings were never submitted becomes the actual problem, separate from whatever the underlying transaction was.

Under the 2026 reform proposal, the exposure compounds further: penalties would apply not only to non-submission but also to filings that are incomplete or inaccurate. If several years' worth of these unfiled or incomplete statements are later discovered within the statute-of-limitations period, the accumulated fines — assessed per related party, per year — can add up to a genuinely material amount. When it's unclear whether a transaction crosses a filing threshold, filing it is usually the lower-risk choice.

Practical insight: submission itself is often the only real defense

International transaction information reporting is not a uniquely Korean formality — it reflects a baseline international commitment, alongside double taxation relief, to preventing double non-taxation and tax evasion in cross-border structures. Korea's enforcement of this baseline tends to be unforgiving in practice: penalties for failing to submit international tax forms are, in most cases, triggered by the binary fact of submission or non-submission, which leaves little room to persuade or explain the matter to the tax authority after the fact. Once a required form wasn't filed, arguing the merits rarely changes the outcome.

Given that, there is no real substitute for the company's own tax team — together with its advisors — tracking each of these filings, thresholds, and deadlines carefully and getting them right the first time.

Practical insight: deadlines are not all the same

One detail that regularly catches companies off guard is that the standard filings (international transaction statement, summary income statement, pricing method reports) are due within 6 months of fiscal year-end, while the integrated information report (local file / master file / CbCR) has a 12-month window. Teams that build a single compliance calendar around one deadline often miss the other.

Practical insight: thresholds reset by transaction type, not just total volume

The exemption thresholds are not a single blended number — they're set separately for goods, services, and intangible asset transactions, and some are measured per related party rather than in aggregate. A company well under the goods threshold can still trigger a filing obligation purely on services or intangibles volume with a single counterparty.

What foreign companies often get wrong

1. Mistake #1: Assuming one exemption threshold applies across all filing types, rather than checking goods, services, and intangibles separately.
2. Mistake #2: Filing the international transaction statement but overlooking the separate arm's-length pricing method report requirement for services or intangibles.
3. Mistake #3: Missing the 12-month deadline for the integrated information report because it's tracked on the same calendar as the 6-month standard filings.
4. Mistake #4: Treating a request for supporting data from the tax authority as optional or low-priority — non-response within the deadline carries its own separate penalty exposure.

Understanding the penalties

Korea's penalty structure for these filings is largely mechanical — triggered by the fact of non-submission, incomplete submission, or false submission, rather than by a substantive review of the underlying transfer pricing position:

• International transaction statement non-submission: a fine of KRW 5 million per foreign related party where the statement is not submitted, or is submitted falsely, without justifiable cause.
• Non-response to a data request: where the tax authority formally requests supporting transfer pricing documentation (under the categories set out in the enforcement decree) and the taxpayer fails to respond — or responds falsely — within 60 days of the request (extendable once, by up to 60 days, for justifiable cause such as fire or disaster), a fine of up to KRW 100 million may be imposed.
• Failure to respond to a data request may also allow the tax authority to estimate arm's-length pricing and cost contribution amounts based on comparable data it can otherwise obtain, and apply that estimate directly.
• Additional fine for continued non-compliance: where a company already fined for non-submission of the integrated report or international transaction statement still fails to comply with the tax authority's correction request within a 30-day cure period, an additional fine of up to KRW 200 million, scaled to the length of the delay, may be imposed.

Extension of filing deadlines

A taxpayer unable to meet the filing deadline for the integrated report, international transaction statement, summary income statement, or pricing method report due to one of the following circumstances may request an extension, which the jurisdictional tax office may approve for up to one year:

• Fire, disaster, or theft preventing submission
• The business facing a serious crisis making submission genuinely difficult
• Relevant books or records having been seized or held by an authorized agency
• The foreign related party's own fiscal year-end not yet having arrived
• Data collection or preparation reasonably requiring more time than the deadline allows
• Other circumstances comparable to the above

Frequently asked questions

Practical checklist

Before the 6-month and 12-month filing deadlines arrive, confirm:

• You've checked exemption thresholds separately for goods, services, and intangible transactions with each foreign related party
• You know which arm's-length pricing method report variant applies to your transaction mix (services / intangibles / other)
• If you participate in a cost-sharing arrangement, the cost contribution adjustment statement is prepared alongside your tax return
• You've confirmed whether your group crosses the KRW 50B/KRW 100B thresholds for the integrated report, or the KRW 1T threshold for CbCR
• Your compliance calendar tracks the 6-month and 12-month deadlines separately
• Supporting documentation for your chosen pricing method is retained and ready to produce on request
• If facing a genuine filing obstacle, you've requested an extension before the deadline rather than after
• Where a transaction's threshold status is genuinely ambiguous — including intra-group funding that runs through a capital account rather than P&L — you've defaulted toward filing rather than omitting it

Key takeaways

Korea's international transaction reporting regime layers several distinct filings — each with its own threshold, deadline, and penalty exposure — rather than a single unified form. Because the penalty structure is largely mechanical and tied to the fact of submission rather than to the merits of a company's transfer pricing position, the most effective compliance strategy is building a calendar around each filing's specific deadline and threshold, well before year-end.

Related guides

• Transfer Pricing for Korean Subsidiaries (coming soon)
• Korea's 2026 Tax Reform Proposal: International Tax Changes at a Glance
• Korean Tax Audit Survival Guide (coming soon)
• Withholding Tax in Korea: What Foreign Businesses Need to Know (coming soon)