Three tax questions before investing in Korea’s National Growth Fund
This calculator addresses subscription sizing and the cost of selling existing units before three years.
It separates the income deduction on initial subscriptions, separate taxation of dividends paid within five years and clawback on an early disposal.
These results cover different conditions and periods: a current-year deduction estimate and several years of past dividend benefits should not be combined into an investment return.
For subscribers and existing holders
Subscribers can identify investment tiers where the deduction stops increasing and check their own taxable-income capacity.
Existing holders can compare the three-year anniversary, proposed sale proceeds and accepted evidence of actual tax relief.
Save the review and ask the institution for contribution certificates, clawback details and exceptional-cause documentation.
Verify eligibility and sale-round terms first
This is a Korea-specific calculator using KRW and the verified 2026 rule set.
Article 91-28 of the Restriction of Special Taxation Act covers eligible dedicated savings subscribed to by December 31, 2030.
The statutory residence and age conditions are age 19 or older, or age 15 or older with employment income other than solely tax-exempt income in the preceding tax year.
The aggregate contribution limit across financial institutions’ dedicated accounts is KRW 200 million per person, and the accounts must invest in eligible fund securities.
The 2026 second-round terms separately specified a KRW 100 million annual limit, restrictions involving comprehensive financial-income taxation during the preceding three years, and exclusion of first-round subscribers.
The second round ran from September 30 to October 15, 2026.
This page neither announces a future round nor guarantees allocation; selecting eligibility confirmation does not replace institutional screening.
Use whole won and distinguish income from the tax base
Investment and prior contributions
Use the actual amount allocated or acquired during the tax year, rather than the requested subscription amount.
Exclude the current investment from prior contributions to avoid double counting.
Sale proceeds can differ from both original investment and capital gain because the market price changes.
Comprehensive income and tax base
Comprehensive income reflects applicable income expenses, including the employment-income deduction; it is not gross salary.
The tax base should include other deductions but exclude this fund deduction.
Entering a tax base that already includes the fund deduction deducts it twice.
A blank required amount is not zero.
Actual-relief evidence and confirmed dividend clawback may remain blank, which means unconfirmed.
Comma-separated amounts are supported; leave the field to apply your edit.
The income deduction uses 40%, 20% and 10% tiers
First KRW 30 million
40% of this portion
KRW 12 million deduction at KRW 30 million invested
KRW 30–50 million
20% of this additional portion
KRW 16 million deduction at KRW 50 million invested
KRW 50–70 million
10% of this additional portion
KRW 18 million deduction at KRW 70 million invested
Investing beyond KRW 70 million does not increase this deduction.
For an investment of KRW 50 million, applying either 20% or 40% to the entire amount is incorrect.
Secondary purchases of units from another holder do not qualify for this income deduction, so choose the acquisition method carefully.
Apply the income limit and KRW 25 million shared cap
The tier-based deduction cannot exceed comprehensive income for the tax year.
The model then applies the remaining KRW 25 million deduction cap under Article 132-2 after other covered deductions.
It displays the reduction from the income limit separately from the reduction from the shared cap, helping explain why a nominal deduction is unavailable.
KRW 50 million invested and KRW 20 million of other covered deductions
The tier deduction is KRW 16 million, but only KRW 5 million remains under the shared cap.
The final fund deduction is therefore limited to KRW 5 million even with sufficient income.
Covered items include eligible credit-card spending, housing-subscription savings, Yellow Umbrella contributions, employee stock ownership contributions, long-term fund savings, certain venture investments and special income deductions excluding insurance contributions.
Check each item’s inclusion against the actual return.
An income deduction is different from a refund
National tax reduction equals tax on the pre-deduction base minus tax on the reduced base.
The calculation uses the Income Tax Act Article 55 progressive rates of 6%, 15%, 24%, 35%, 38%, 40%, 42% and 45%, then adds an estimated local reduction of 10% of the national reduction.
When a deduction crosses a tax band, both portions are recalculated; multiplying the full deduction by one marginal rate can overstate the result.
KRW 60 million tax base and KRW 16 million deduction
Assuming no other limiting cap, the new base is KRW 44 million.
National tax before credits falls from KRW 8,640,000 to KRW 5,340,000: a KRW 3,300,000 reduction, plus KRW 330,000 estimated local reduction, totaling KRW 3,630,000.
Tax credits, minimum-tax rules and taxes already paid are excluded, so this amount is not a bank-account refund.
If the tax base is already zero, additional deductions produce no modeled tax reduction.
The minimum subscription reference inverts the income, shared-cap and tax-base capacity; it is not an investment recommendation.
The additional KRW 10,000 comparison also recalculates the same limits and progressive schedule.
Separate dividend taxation at 9.9% within five years
For an eligible investment meeting the three-year holding condition, dividends paid within five years from investment receive 9% national tax plus 0.9% local tax.
Eligible dividends are excluded from comprehensive income.
Investment starts on the first acquisition date for each account; if all units were disposed of and units were acquired again, confirm the new acquisition date.
Check the actual payment date rather than relying only on the income year.
KRW 3 million taxable dividend
Within the eligible payment window, national tax is KRW 270,000 and local tax KRW 27,000, totaling KRW 297,000.
The reference difference from ordinary 15.4% withholding of KRW 462,000 is KRW 165,000.
Taxable dividends may differ from cash distributions; use the institution’s tax statement.
If other financial income plus this dividend exceeds KRW 20 million under the ordinary-tax scenario, a 15.4% comparison does not establish final liability.
The calculator preserves the withholding benchmark and withholds a final comparison.
Payments outside the five-year window receive no modeled fund benefit and display ordinary withholding as a reference.
Separate deduction clawback from dividend-benefit clawback
National tax connected to the deduction
If a deduction was actually claimed for units sold before the three-year anniversary, the default clawback reference is 14% of sale proceeds.
It is not 14% of profit, so a loss-making sale can still require review.
Accepted evidence of lower actual tax relief can reduce that amount.
National tax connected to dividends
Article 91-28(5) separately addresses recovery of tax benefits on past dividends.
Neither the expected dividend nor the current deduction estimate replaces the past-benefit assessment.
Enter institution-confirmed national dividend clawback; an unknown amount withholds the total.
Entering zero in actual-relief evidence means zero national tax relief has been accepted, rather than that evidence is unavailable.
Do not substitute the current-year estimate for proof.
Local clawback is a 10% budgeting estimate; confirm the actual assessment and rounding with the institution.
Trading fees and taxes on the disposal itself are outside this clawback budget.
Worked sale example and calendar boundaries
Account first acquired on 2026-06-12
The three-year anniversary is 2029-06-12 and the last date in the five-year dividend window is 2031-06-12.
Selling for KRW 20 million on 2029-06-11 produces a KRW 2,800,000 default national reference.
Accepted actual national tax relief of KRW 1,500,000 lowers deduction clawback to that amount.
With separately confirmed past dividend clawback of KRW 100,000, national clawback totals KRW 1,600,000; estimated local tax is KRW 160,000, making a KRW 1,760,000 budget.
A sale on 2029-06-12 itself has no modeled clawback for disposal before three years.
Calendar years are added; a February 29 start maps to that month’s last day if the target year lacks the matching day.
Check the institution’s actual settlement date and period treatment.
The day count measures the interval from the entered sale date to the anniversary, rather than from today.
Exceptional causes require evidence and a declaration
- Death or overseas emigration under the Overseas Emigration Act
- A qualifying disaster, retirement or business closure arising within six months before disposal
- Injury or illness arising in that period and requiring at least three months of inpatient treatment or care
- The institution’s business suspension, revocation of authorization, dissolution resolution or bankruptcy
Check Enforcement Decree Article 93-14(8) together with the exceptional-termination declaration required by paragraph (9).
Provide the institution with cause dates, the proposed disposal date and retirement, closure or medical evidence.
A similar situation does not establish an exemption; leave the status under review until verified.
The 10% addition in Act Article 91-28(8) concerns the institution’s failure to remit clawback tax on time and is not automatically added to the individual’s budget.
How to use the results
- Confirm eligibility, round restrictions, dedicated-account status and remaining capacity with the seller.
- Enter the allocated investment, comprehensive income, tax base after other deductions and use of the shared cap.
- Enter a payment date, taxable dividend and other same-year financial income to examine the withholding benchmark.
- For a sale scenario, verify the past deduction claim, accepted actual-relief evidence, dividend clawback and exceptional-cause status.
- Save the TXT review and request contribution certificates or clawback and declaration documents.
The five-year closed-end product does not become freely redeemable after three years.
Post-listing sales may face low liquidity or discounted prices.
The product is high risk and does not guarantee principal; subordinated loss absorption is not an investor principal guarantee.
Illustrative dividends and proceeds are neither expected returns nor market quotes.
Frequently asked questions
Do I receive 40% of my entire investment as a refund?
No.
The 40% deduction applies to the first KRW 30 million.
The next KRW 20 million receives 20%, and the following KRW 20 million receives 10%.
The maximum income deduction is KRW 18 million.
Tax reduction then depends on income limits and the progressive tax schedule; it is not a cash refund.
Can I enter gross salary as comprehensive income?
Gross salary, comprehensive income and the tax base are different figures.
Use income after employment-income expenses and the tax base after other deductions but before this fund deduction.
Check the corresponding fields on your Korean withholding certificate or return worksheet.
What if other deductions already use the KRW 25 million cap?
If deductions covered by Article 132-2 already reach KRW 25 million, this model leaves no capacity for the fund deduction.
Do not add every year-end item indiscriminately.
Insurance contributions and certain direct venture investments are among items excluded from this particular shared cap.
Does buying listed units from another holder qualify for the deduction?
Acquiring units owned by another person is excluded from the Article 91-28(2) income deduction.
Selecting secondary purchase therefore sets the deduction to zero.
Confirm separate dividend-tax eligibility within a dedicated account and the account’s acquisition date with the institution.
Does a sale on the three-year anniversary trigger the 14% clawback?
The provision applies to a disposal before the date three years from investment.
A sale on that anniversary is outside this modeled early-sale clawback.
Reaching three years does not open a redemption right; confirm the transaction date, settlement treatment and actual ability to sell.
Is lower actual tax relief automatically accepted?
You must establish that the actual tax relief is lower than the 14% reference.
The current-year saving estimate is not that evidence.
Enter institution-accepted national tax relief to compare the lower amount.
Leaving the field blank retains the 14% reference budget.
Does leaving dividend clawback blank mean zero?
Blank means unconfirmed, so total clawback and proceeds after the clawback budget are withheld.
Deduction clawback and dividend-benefit clawback are separate.
Enter zero only after confirming that no past dividend-benefit clawback applies.
Does retirement always exempt the sale from clawback?
Listed causes such as retirement require checking the six-month timing condition and submitting the exceptional-termination declaration.
Death and overseas emigration are separate causes.
Keep the status under review until the institution accepts the cause, evidence and declaration.
Official sources and rule dates
Sources were checked on 2026-10-28.
Act Article 91-28 was introduced on 2026-05-12; the Act and Enforcement Decree versions effective 2026-09-18 were cross-checked.
Future-date results hold the verified 2026 rules constant and do not forecast later legislation.
Recheck statutory amendments, sale-round terms and rules on the actual dividend or disposal date.
Check capacity before subscribing and evidence before selling
Vary the investment after checking income and the shared deduction cap, then compare the anniversary with the institution’s clawback statement if a sale is needed.
A decision requires both the calculation and confirmed eligibility, actual-relief evidence and past dividend-benefit details.
Use the saved TXT review to prepare the documents for that discussion.