From 2026, dividends from high-dividend companies in Korea can be taxed separately instead of being added to other income. Article 104-27 of the Restriction of Special Taxation Act takes the cash part of dividends (qualifying dividends) arising up to the business year that includes 31 December 2028 from qualifying listed companies out of the global income tax base and taxes it in four bands: 14% up to 20 million won, 20% up to 300 million, 25% up to 5 billion, and 30% above. The addendum applies it to dividends received from 1 January 2026. The calculator gives the separate tax.
1. Cash dividends from high-dividend companies are taxed separately (on application).
2. Rates: 14% up to 20m · 20% up to 300m · 25% up to 5bn · 30% above.
3. Dividends received from 1 January 2026, arising up to the business year including 31 December 2028.
Calculator
Updates as you type. Applies the four bands in Article 104-27(2) to qualifying dividends only. Local income tax and your other income are not included; whether a company qualifies depends on its own disclosure.
The rate table — Art. 104-27(2)
| Qualifying dividends | Rate (text) | Worth noting (ours) |
|---|---|---|
| Up to 20 million won | 14/100 of the total | 2.8 million at 20 million |
| 20m–300m | 2.8 million + 20/100 of the excess over 20m | 58.8 million at 300m |
| 300m–5bn | 58.8 million + 25/100 of the excess over 300m | 1,233.8 million at 5bn |
| Over 5bn | 1,233.8 million + 30/100 of the excess over 5bn | — |
The running totals (2.8m, 58.8m, 1,233.8m) match the tax on a full lower band exactly; we recalculated all three.
Three sums — our example
| Qualifying dividends (our example) | Separate tax | Worth noting (our sum) |
|---|---|---|
| 10 million won | 1.4 million won | 10m × 14% |
| 50 million won | 8.8 million won | 2.8m + 30m × 20% |
| 500 million won | 108.8 million won | 58.8m + 200m × 25% |
Local income tax wasn’t read this time and isn’t included. Whether the special rule is better than global taxation depends on your other income, which is outside the calculator. The 20 million won financial income line is in financial income comprehensive taxation.
What a high-dividend company is — para. 1
A Korean company meeting all three: (1) listed, not on KONEX, at year end (investment companies etc. excluded); (2) prior-year dividends not below the 2024 business year; (3) a prior-year payout ratio of 40%+, or 25%+ with dividends up 10%+ on the year before. The company must disclose that it qualifies by the day after the AGM dividend resolution. The test is in high-dividend company checker.
Claiming it — para. 3, Decree Art. 104-24
Qualifying dividends are the cash part of dividends from a high-dividend company. A resident must file the separate-taxation application set by ministry ordinance with the tax office at the final global income tax return for the year received.
Checklist
- ☐ Did the company disclose that it qualifies?
- ☐ Cash dividends only (not stock dividends)
- ☐ Received on or after 1 January 2026
- ☐ File the application with the final return
- ☐ Compare with global taxation (ask a tax adviser)
Questions that remain
Isn’t tax already withheld on payment?
Withholding is outside this article and we didn’t cover it. This article only sets the computed tax under this table instead of aggregation.
Do ETF distributions count?
Item 1’s proviso excludes investment companies and similar entities (those in Corporate Tax Act Art. 51-2(1)). Where ETF distributions fall we didn’t check.
Sources
- Korean law database (law.go.kr) — Restriction of Special Taxation Act Art. 104-27 and addendum — source (effective 18 September 2026, Act No. 21467; article added 23 Dec 2025, addendum Act No. 21223 Art. 23; checked 20 October 2026). Three conditions, through the 2028 business year, exclusion from aggregation, the four rate bands (formula image alt text), application, disclosure, dividends received from 1 January 2026.
- Korean law database — Enforcement Decree Art. 104-24 — source (effective 18 September 2026, Decree No. 36587; added 27 Feb 2026; checked 20 October 2026). Cash dividends, excluded entities, dividend amount and payout ratio, 25% or 0 when profit is zero or below, application, disclosure method.
- Not read. Local income tax; withholding; the application form.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Company disclosures — whether it qualifies.
- Tax office or adviser — comparing with global taxation.
Written on 20 October 2026. The content is from the source; the glosses are ours.
