On 12 May 2026 Korea’s Restriction of Special Taxation Act gained a new tax break for the National Growth Fund savings account (formally the “citizen-participation national growth collective investment securities savings”, Art. 91-28, Act No. 21612, in force from promulgation). Invest through the dedicated account in a national growth fund for at least 3 years and you can take 40% of up to 30 million won, then 20% and 10%, off your aggregate income — stopping at 18 million won once you pass 70 million. Sell or redeem within 3 years and 14% of that amount is clawed back. The deduction sits inside the 25 million won overall cap with card and housing-loan deductions. Our calculator takes your investment and aggregate income.
1. Deduction: 40% up to 30m · 20% to 50m · 10% to 70m · 18m above that (Art. 91-28(2)).
2. Hold for 3 years; selling or redeeming earlier costs 14% of that amount (para. 6).
3. Inside the 25m overall cap, added to card and housing deductions (Art. 132-2(1)7-2).
Calculator
Updates as you type. Table in Art. 91-28(2): 40% up to 30m, then 20% and 10%, 18m from 70m. Limited to aggregate income, then to what is left of the 25m overall cap (Art. 132-2(1)7-2). Clawback is 14% of the amount sold or redeemed within 3 years (Art. 91-28(6)). Won fractions cut (ours). We read the table as applying to each year’s investment.
The deduction table — Art. 91-28(2)
| Investment per person | Deduction (statute) | Worth noting (ours) |
|---|---|---|
| Up to 30m won | 40% of the investment | 30m gives 12m |
| 30m to 50m | 12m + 20% of the excess over 30m | 50m gives 16m |
| 50m to 70m | 16m + 10% of the excess over 50m | 70m gives 18m |
| Over 70m | 18m | More money, same deduction |
The table sits in an image on the law database page, so we took it from the image description (alt text) and checked that the bands join up: 12m → 16m → 18m. The deduction is limited to that year’s aggregate income, and does not apply if you invest by buying someone else’s units. Paragraph 4 asks for a certificate showing “that year’s investment” at year-end settlement or the May return, so we read the table as applying to each year’s investment. At 70m the effective rate is 18m ÷ 70m, about 25.7% (ours).
Who, into what, how much — Art. 91-28(1), (3) and the Decree
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Deadline | Join through the dedicated account by 31 December 2030 | Applies to accounts opened after the Act took effect on 12 May 2026 (Addenda Art. 2) |
| Who | 19 or older on joining, or 15 or older with earned income in the previous tax period (not only non-taxable income) | 15–18-year-olds submit proof of the prior year’s earnings (Decree Art. 93-14(7)) |
| Contribution cap | 200 million won per person across all financial institutions | Interest and dividends do not count toward it (Decree para. 5) |
| What it buys | National growth fund units only: a public fund investing in private funds that back strategic high-tech companies, with a term of 5 years or more | Decree: closed-end, fund-of-private-funds, at least 60% in those companies |
| Dividends | Dividends paid within 5 years of investing are taxed at 9% and left out of the global income base (para. 1) | A separate break from the deduction |
| Investment date | The day units are first bought in each account; if all are sold and bought again, the new purchase date (Decree para. 6) | The 3 years run from here |
Selling within 3 years — paras. 5 and 6
If units are sold to a third party or redeemed (including partly) before 3 years from the investment date, two things are recovered. For the 9% dividend rate, the tax saved is clawed back (para. 5); for the deduction, the institution withholds 14% of the amount sold or redeemed and pays it by the 10th of the next month (para. 6). If you show that the tax the deduction actually saved you is less than that, only the actual saving is recovered. Redeeming 30m early means 30m × 14% = 4.2m won (ours). Withdrawals are treated as coming out of principal first (Decree para. 4).
| No clawback (Decree Art. 93-14(8)) | Statute | Worth noting (ours) |
|---|---|---|
| Item 1 | The saver’s death or emigration under the Overseas Emigration Act | — |
| Item 2 (arising within 6 months before the sale) | Natural disaster, the saver’s retirement, closure of the business, injury or illness needing 3 months or more of hospital care or recuperation, suspension, licence cancellation, dissolution or bankruptcy of the institution | File a special-termination notice with the institution (Decree para. 9) |
If someone joined on the 15-plus earned-income route and the National Tax Service reports that they did not qualify, the account is treated as closed on the day of that notice and the clawback runs as if sold that day (para. 11). An objection can be lodged with the NTS, which must reply within 14 days (Decree para. 11).
Read it with the 25 million won overall cap
The same amendment added item 7-2 to Art. 132-2(1), putting this deduction under the overall cap. Added to the card deduction, the housing-loan special deduction, the housing subscription savings deduction and the rest, anything over 25m is treated as nil. Item 7-2 applies from year-end settlements and returns made after the Act took effect (Addenda Art. 3). If your other deductions already total 18m, a 30m investment that gives 12m by the table counts only for the 7m left, and 5m is lost (ours). The whole cap is worked through in the income deduction overall cap calculator.
Questions that remain
How much tax does it actually save? A deduction lowers the tax base, so the saving depends on your bracket. We did not read the rate table (Income Tax Act Art. 55) this time, so we give no figure.
Is this the same as an ISA? No, it is a different article. The government’s proposed “productive finance ISA” is covered in ISA account basics.
Sources
- Korean law database (law.go.kr) — Restriction of Special Taxation Act Arts. 91-28, 132-2 and Addenda (Act No. 21612) — source (current text, effective 18 September 2026, Act No. 21467; checked 29 October 2026). Paras. 1–12: eligibility, deadline, 9% dividends, the deduction table (image alt), the 200m account cap, the certificate, the 14% clawback, earned-income checks and deemed closure; Art. 132-2(1)7-2; Addenda Arts. 1–3 (in force on promulgation; application to new accounts and settlements).
- Korean law database — Enforcement Decree Art. 93-14 — source (current text, effective 18 September 2026, Decree No. 36587; checked 29 October 2026). Closed-end fund of private funds; shares, equity, bonds and loans of strategic high-tech companies; 60%; principal first; interest and dividends outside the cap; investment date; unavoidable reasons; 14-day reply (added 22 May 2026).
- Not read. Ministry ordinances (forms, proof of earnings), the actual list of national growth fund products, the Income Tax Act Art. 55 rate table.
- What we added. The “worth noting” column and the Korean everyday gloss.
Written on 29 October 2026. The content is from the source; the glosses are ours.
