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International Taxation

Transfer pricing

Korean tax authorities tend to closely scrutinize international transactions between foreign-affiliated companies on the assumption that multinational corporations more often than not employ aggressive tax planning to minimize their tax burden in Korea.

Foreign businesses sometimes complain of the NTS’s inconsistent execution of tax audit practices in some cases, especially in the field of transfer pricing probes.

Many of our transfer pricing specialists have extensive experience across a wide variety of industries in auditing and investigating multinational corporations in the government sector as well as in the private sector.

We are confident in our ability to help our clients come to the best solution in any circumstances in the dynamic Korean market.

Here is a brief overview of our transfer pricing work procedure.

  • 1. Analyze intercompany transactions, including pricing, functions, terms of contract, economic environment, accompanying risks and other relevant factors.
  • 2. Search for the best method and most suitable comparables, when needed.
  • 3. Reconcile differences in compared transactions.
  • 4. Determine arm’s-length price or range through economic, statistical and legal methods.
  • 5. Document and support the validation of transfer price.
  • 6. Represent and support our clients in case of conflicts with tax authorities.

If you have any questions regarding your company’s transfer price policy and other international taxation matters, please do not hesitate to contact us.

Advance price agreement and mutual agreement

Permanent establishment issues including dependent agent and application of tax treaties

Incorporation, management and closing of foreign companies’ Korean branches or subsidiaries