■ Taxpayers that have transactions with a foreign special related party are
               obligated to submit information on overall management and transfer pricing.

               ○ Documents to submit: International related party transaction integrated report

               * Including information on overall management and transfer pricing of the multinational company.

            - Local file: Information on each company within a corporate group (e.g.,organizational
               structure, line of business), transfer pricing information of major foreign related party
              transactions, financial status

            - Master file: Information on special related parties prescribed by the Decree of the Ministry
              of Strategy and Finance – organizational structure, line of business, intangible assets,
              financial transactions, debt and taxation status

            - Country-by-Country Report : Tax jurisdiction by tax jurisdiction basis sales, income before
              tax, amount of taxes paid, amount of capital, retained earnings, number of employees,
              tangible assets, list of local companies and their business activities

               ○ Taxpayers required to submit file

            - Local file, master file: Domestic corporation and domestic place of business of foreign
              corporation that fall under both of the following conditions:

              ① Annual sales exceed KRW 100 billion

              ② Annual transactions with foreign special related parties exceed KRW 50 billion

            - Country-by-Country Report : Domestic companies (ultimate parent company) whose
              consolidated sales in the previous year exceed KRW 1 trillion

               ○ Submission period: Within 12 months of the last day of the relevant business year

               ○ Fine for failure to submit files: Up to KRW 10 million for each file (maximum of KRW
                   30 million in total)

               ○ Deadline for submission: By the end of 2017 for the files attributable to the taxable year of 2016

            ■ A taxpayer who failed to submit all or part of the specification of international trade or
               submitted false data shall be fined.

               * The amount of the fine imposed for failure to submit a specification of international trade
                  or submission of a false specification shall be KRW 5 million per foreign special related party.

               ※ Applicable period: The previous regulations (fine of KRW 10 million) will apply for
                    violations that occurred on or before Feb. 7, 2017.

    When applying Article 27-2 of the Corporate Tax Act (Special Cases, Including Non-Inclusion of Expenses Incurred in Relation to Passenger Vehicles for Business Use), if a domestic company purchased or leased a business-use passenger vehicle and used it for business-related purposes, the distance travelled for such purpose shall be considered ‘distance travelled for business use’ as prescribed by Article 27-2 (4) of the Enforcement Rule of the same Act.

    A domestic company’s passenger vehicles to which Article 27-2 of the Corporate Tax Act applies refers to those that fall under Article 1 (2) 3 of the Individual Consumption Tax Act, excluding passenger vehicles used for the purpose of making profit by companies operating a business in Article 19 of the Enforcement Decree of the Value Added Tax Act, a facility leasing business as defined in Article 2 Subparagraph 9 of the Specialized Credit Finance Business Act, or a business classified as a funeral home and funeral related business under the Korea Standard Industrial Classification. Also, where a company does not have an auto insurance that only insures drivers who are the company’s executive or employees, or others who drive the car for the company’s business under a contract (business auto insurance) for the full business year (in the case of leased vehicles, the lease period during the business year shall apply), income for the business year shall be calculated in accordance with Article 50-2 (4) 2 of the Enforcement Decree of the Corporate Tax Act.

   Where a domestic company hired a driver for business-use vehicles from an outside company, the payment for the driver’s service shall not be included in “expenses related to business-use vehicles” under Article 50-2 (2) of the Enforcement Decree of the Corporate Tax Act.