Beginning in January subsequent 12 months, each KOSPI and KOSDAQ inventory transaction tax charges will enhance by 0.05 share factors. In line with the Ministry of Economic system and Finance on Dec. 2, the revision invoice for the enforcement decrees of the Inventory Transaction Tax Act and the Revenue Tax Act is predicted to take impact starting Jan. 1 subsequent 12 months after going via the general public discover process.
Underneath the enforcement decree revision, the inventory transaction tax charge can be restored to the extent earlier than the discount in 2023. The transaction tax charge for the KOSPI market can be adjusted from the present 0 % to 0.05 %. The agricultural and fishery particular tax at 0.15 % can be maintained. The KOSDAQ and Okay-OTC markets with no agricultural and fishery particular tax can be adjusted from 0.15 % to 0.20 %.
Together with the agricultural and fishery particular tax, the efficient tax charge imposed when promoting listed shares on each the KOSPI and KOSDAQ markets will develop into the identical at 0.2 %. For instance, when you promote 100 million received (roughly $67,967) price of KOSPI shares, you’ve got been paying solely 150,000 received of the agricultural and fishery particular tax till this 12 months, however beginning subsequent 12 months, a complete of 200,000 received can be levied together with an extra 50,000 received in transaction tax.
Beforehand, the inventory transaction tax had been lowered in anticipation of the introduction of the monetary funding earnings tax. The inventory transaction tax charge for the KOSPI and KOSDAQ markets was lowered by 0.02 share factors in 2021, 0.03 share factors in 2023, 0.02 share factors final 12 months, and 0.03 share factors this 12 months. In the meantime, the monetary funding earnings tax, which was scheduled to be launched in 2023 underneath the 2020 tax regulation revision, was postponed for 2 years to this 12 months, however was fully scrapped underneath final 12 months’s tax regulation revision.
With the restoration of the inventory transaction tax, a big tax income enhance is predicted over the following 5 years. The Nationwide Meeting Price range Workplace beforehand analyzed that because of the authorities’s tax regulation revisions, inventory transaction tax income will enhance by roughly 12.8 trillion received from 2026 to 2030. That is higher than the federal government’s projected tax income enhance of 11.48 trillion received.
“Diminished dividends,” which have been exploited as a tax avoidance device by main shareholders, can be taxed just for main shareholders. Underneath the present system, lowered dividends are tax exempt, however going ahead, dividend earnings tax can be imposed on the portion exceeding the acquisition worth of shares held by main shareholders of listed corporations and shareholders of unlisted corporations. This is applicable to dividends acquired after Jan. 1 subsequent 12 months.
