Whether your interest and dividends go over 20 million won in a year depends on which year each item belongs to. Income Tax Act Enforcement Decree Articles 45 and 46 set that day, the time of receipt, for each kind of income. Deposit interest belongs to the day it is actually paid, not the maturity date; on cancellation, the cancellation date; on an extension, the day of extension. Dividends by appropriation of surplus belong to the company’s resolution date, not the day the money arrives. A deposit maturing at the turn of the year, or a dividend resolved in one year and paid in the next, can change the 20 million won test. Pick the type and the date to see the year and that year’s total.
1. Deposit and savings interest: the day actually paid — cancellation date if cancelled, extension day if extended (Decree Art. 45 4).
2. Surplus dividends: the resolution date; fund income: the day paid (Decree Art. 46 2 and 7).
3. If that year’s interest and dividends total 20 million won or less, withheld income is not added to comprehensive income (Act Art. 14(3)6).
Checker
Updates as you type. Pick the type and enter the date the rule names (shown under “Date that counts”); the year of that date is the year the income belongs to (Decree Arts. 45–46). The 20 million won test adds it to the other interest and dividends you enter for the same year (Art. 14(3)6). Only the main items are listed; inheritance, gifts and deemed dividends have their own dates.
When interest is received — Decree Art. 45
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Item 4(a) | Interest on ordinary and time deposits, instalment savings: the day the interest is actually paid | Written as the day paid, not the maturity date |
| Item 4(b) | Interest with a clause adding it to principal: the day it is added to principal | — |
| Items 4(c), 4(d) | Interest paid on cancellation: the cancellation date / term extended: the day of extension | Extending alone triggers it |
| Items 2, 3 | Bearer bonds: the day received / registered bonds: the agreed payment date | — |
| Item 8 | Gains on savings-type insurance: the day the benefit or refund is paid, or the cancellation date if cancelled early | — |
| Item 9-2 | Private (non-business) loans: the agreed interest date; if there is none, or it is paid early, the day paid | Interest on money lent between individuals |
| Item 11 | Where the asset is inherited or gifted: the date inheritance begins or the gift date | Not in the checker |
When dividends are received — Decree Art. 46
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Item 2 | Dividends by appropriation of surplus: the company’s resolution date for appropriating surplus | May differ from the day the money arrives |
| Item 1 | Bearer shares: the day received | — |
| Item 7 | Income from collective investment vehicles: the day paid; distributions with a clause adding them to principal, the day added | Reinvesting funds use the reinvestment date |
| Item 8 | Derivative-linked securities and bonds: the day paid (or added to principal under such a clause) | — |
| Item 6 | Dividends deemed under the Corporate Tax Act: the day the company’s accounts for that year are settled | Not in the checker |
The articles do not say whether quarterly or interim dividends declared by the board count as “appropriation of surplus” under item 2. Article 46 also has no separate item for dividends on foreign shares, so the checker leaves them out. In those cases, start with the tax year shown on your financial institution’s income statement.
Three sums — our example
| Case (our example) | Year · total | Worth noting (ours) |
|---|---|---|
| Other interest and dividends of 15 million won in 2026; 6 million won of deposit interest paid on 28 December 2026 | 2026 · 21 million won | Over 20 million won, so 2026’s financial income is taxed comprehensively |
| The same 6 million won actually paid on 4 January 2027 (nothing else in 2027) | 2027 · 6 million won | 2026 at 15 million and 2027 at 6 million are both under 20 million |
| A December-year-end company resolves to appropriate surplus on 25 March 2027; the dividend arrives in April | 2027 | Read literally, Art. 46 item 2 points to the resolution year (our reading) |
All sums are our examples. The articles do not say whether you can choose to delay payment, or how unclaimed interest after maturity is treated. If you plan to move dates to save tax, check with a tax office or adviser first.
The 15.4% and 25% withheld on interest are worked out in interest income tax calculator.
Checklist
- ☐ Deposit maturing around New Year: check the actual payment date
- ☐ Cancelled or extended deposits: that day counts
- ☐ Dividends: the resolution year — compare with the year on your income statement
- ☐ Reinvesting funds: the day added to principal
- ☐ Compare the year’s interest and dividends with 20 million won
Questions that remain
When is tax withheld?
When tax is withheld (time of payment) and which year income belongs to (time of receipt) are set by different provisions. This article covers only the time of receipt in Decree Arts. 45 and 46.
Is the 20 million won interest and dividends together?
Yes. Art. 14(3)6 refers to “the total of that income” — interest and dividends outside items 3 to 5 — and keeps it out of comprehensive income if it is 20 million won or less and was withheld.
Sources
- Korean law database (law.go.kr) — Income Tax Act Enforcement Decree Arts. 45–46 — source (current text, effective 1 October 2026, Presidential Decree No. 36737; checked 26 October 2026). Art. 45 (interest: deposits actually paid, added to principal, cancellation, extension; bonds; savings insurance; private loans; inheritance and gifts), Art. 46 (dividends: bearer shares, surplus resolution date, deemed dividends, settlement date, funds and derivative-linked securities when paid).
- Korean law database — Income Tax Act Art. 14(3) — source (current text, effective 1 July 2026, Act No. 21221; checked 26 October 2026). Item 6: the 20 million won threshold and the withholding condition.
- Not read. Provisions on the time of withholding (deemed payment), interpretations on quarterly, interim and foreign dividends.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Your financial institution’s income statement — the tax year of each item.
- Your local tax office — quarterly, interim and foreign dividends.
Written on 26 October 2026. The content is from the source; the glosses are ours.
