Tax-free comprehensive savings are accounts set up under Article 88-2 of Korea’s Restriction of Special Taxation Act. If an eligible person joins with principal of 50 million won or less per person, no income tax is charged on the interest and dividends the account earns. The joining deadline is 31 December 2028. The article lists seven groups by name, from people aged 65 or over who receive the basic pension to registered disabled people. Pick a group and enter principal, rate and term to see whether you qualify, your limit and the tax saved.
1. Seven groups — 65 or over on the basic pension, registered disabled people, independence patriots and their bereaved or family, wounded national merit persons, basic livelihood recipients, Agent Orange after-effect patients, people injured in the 18 May movement.
2. Up to 50 million won of principal per person — reduced by any tax-favoured savings still held.
3. Join by 31 December 2028 and no income tax is charged on the interest and dividends.
Checker
Updates as you type. Eligibility, the 50m won limit and the 31 December 2028 deadline are from Art. 88-2(1). Interest is simple interest for illustration (our sum); the tax saved is 14% income tax plus 10% of that as local tax, fractions dropped (our method). The joining procedure and proof are set by decree, which we did not read.
Restriction of Special Taxation Act Art. 88-2
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Para. 1, main text | Where a resident in one of the following groups joins, by 31 December 2028, decree-specified savings with principal of 50 million won or less per person (if tax-favoured comprehensive savings have not been closed, 50 million won minus their total contract amount), no income tax is charged on interest and dividend income from those savings. | Current text, as amended up to 23 Dec 2025 |
| Item 1 | A resident aged 65 or over who is a basic pension recipient under the Basic Pension Act | Both age and receipt |
| Item 2 | A disabled person registered under the Act on Welfare of Persons with Disabilities | Registration is the test |
| Item 3 | Independence patriots registered under their Act, and their bereaved families or families | — |
| Item 4 | Wounded persons registered under the Act on Honourable Treatment of Persons of Distinguished Service | — |
| Item 5 | Recipients under the National Basic Living Security Act | — |
| Items 6–7 | Agent Orange after-effect patients; people injured in the 18 May democracy movement | — |
| Paras. 2 / 3 | Para. 2 deleted (31 Dec 2024) / joining procedure, checking eligibility, computing contract totals and management are set by presidential decree | We did not read the decree |
If you still hold tax-favoured savings
Tax-favoured comprehensive savings under Article 89 of the same Act could be joined only until 31 December 2014; interest and dividends were taxed at 9/100 and kept out of comprehensive income, with a limit of 10 million won per person aged 20 or over, or 30 million won for the Art. 88-2 groups. If you have not closed one, its contract total comes off your tax-free savings limit — that is the “tax-favoured savings still held” box.
Three sums — our example
| Case (our example) | Tax not withheld | Worth noting (ours) |
|---|---|---|
| Aged 70 on the basic pension, 50m won principal, 3% a year, 12 months | 231,000 won | 1.5m won interest × 14% = 210,000 + local tax 21,000 |
| Registered disabled, 10m won of tax-favoured savings still held, wants to put in 50m | 184,800 won | Limit 40m won — the other 10m is taxed normally |
| Basic livelihood recipient, 30m won principal, 3.5% a year, 12 months | 161,700 won | 15.4% of 1.05m won interest |
Interest is simple interest for clarity (our sum). We include local tax in the saving because Local Tax Act Art. 103-13(1) sets individual local income tax at 10/100 of income tax “after special tax treatment” — if income tax is nil, so is its 10% (our reading). What an ordinary deposit would lose is shown the same way in interest income tax calculator.
Being 65 is not enough on its own
Item 1 reads “a resident aged 65 or over who is a basic pension recipient”. Reaching 65 without receiving the basic pension does not qualify under item 1 (another item may still apply). Whether you would receive it can be worked out first in basic pension calculator.
Tax-free interest and dividends also appear to stay out of the 20 million won financial income total, because Income Tax Act Art. 14(3)1 keeps income not taxed under the Restriction of Special Taxation Act out of the comprehensive tax base (our reading).
Checklist
- ☐ One of the seven groups? (65+ also needs the basic pension)
- ☐ Contract total of any unclosed tax-favoured savings
- ☐ 50 million won per person across all institutions
- ☐ Join by 31 December 2028
- ☐ Proof of eligibility as your institution asks
Questions that remain
What if I stop receiving the basic pension after joining?
Art. 88-2 sets who may join and the limit; it says nothing about later changes. Management is left to the decree, so ask your institution.
Can I hold an ISA as well?
The article does not mention ISAs. ISA limits and rates are in ISA calculator.
What about the special tax for rural development?
We did not check that Act. The checker’s saving covers income tax and local income tax only.
Sources
- Korean law database (law.go.kr) — Restriction of Special Taxation Act Arts. 88-2, 89 — source (current text, effective 18 September 2026, Act No. 21467; checked 22 October 2026). Art. 88-2(1) (seven groups, 50 million won per person, tax-favoured savings deducted, 31 December 2028, no income tax), para. 2 deleted, para. 3 (decree), Art. 89(1) (tax-favoured savings joinable until 31 December 2014, 9%, 10m/30m won).
- Korean law database — Income Tax Act Art. 14(3)1 — source (current text, effective 1 July 2026, Act No. 21221; checked 22 October 2026). Income not taxed under the Restriction of Special Taxation Act is not added.
- Korean law database — Local Tax Act Art. 103-13(1) — source (current text, effective 1 July 2026, Act No. 21308; checked 22 October 2026). 10/100 of income tax after special treatment.
- Not read. The Enforcement Decree on joining and proof; the Special Tax for Rural Development Act.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- The institution you plan to join with — proof needed and a check of existing tax-favoured or tax-free savings.
- Your local community centre or the National Pension Service — whether you receive the basic pension.
Written on 22 October 2026. The content is from the source; the glosses are ours.
