Notice 26-013, promulgated on 24 July 2026, strengthens transfer-pricing documentation requirements for multinational enterprises operating through Korean subsidiaries. The regulation mandates that master-file and local-file updates be submitted within 90 days of fiscal-year close, reducing the prior 180-day window. New mandatory templates now require granular analysis of intra-group service transactions, intangible-license royalties, and cost-sharing arrangements, aligned with the latest OECD Transfer Pricing Guidelines (2024). Penalties for inadequate documentation have been increased to a maximum of 50 percent of the underreported tax amount, and the NTS has been granted expanded audit powers to request contemporaneous financial records from affiliated foreign entities.
Key Takeaways
- Shortened Filing Deadline: Multinationals must finalize and submit transfer-pricing documentation no later than 90 days after the fiscal year-end, necessitating earlier engagement with tax advisers and robust internal data-gathering processes.
- Enhanced Penalty Regime: Failure to maintain compliant documentation triggers a default penalty of 20 percent on the tax difference, with an additional 30 percent surcharge if the NTS determines that the deficiency was attributable to intentional profit-shifting.
Disclaimer:This article is compiled and summarized based on publicly available information and is for general information and academic exchange purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. For tax planning, please consult a qualified professional tax advisor or legal counsel.
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