Tokenized Security (STO) & Fractional Investment Tax Calculator
This calculator estimates the tax on income from fractional investment and tokenized securities (STO, Security Token Offering) in Korea under 2026 tax law. Fractional-investment platforms — MusicCow (music copyright royalties), Kasa/Funble (real estate), Tessa/ArtTogether (art), Bancow (Korean cattle) — and blockchain-based token securities are, since the Financial Services Commission’s 2023 regulatory framework, mostly structured as one of two Capital Markets Act securities: an investment contract security or a non-monetary trust beneficiary certificate. The crucial point most investors miss is that this income is NOT taxed like cryptocurrency. It is taxed as DIVIDEND income: 15.4% withholding, potentially pulled into financial-income aggregate taxation, and exempt from securities transaction tax. Enter your periodic distributions, redemption gains, and secondary-market trading gains separately, and the calculator shows the withholding tax, whether you cross into aggregate taxation, and your after-tax return.
Why it is dividend income (not crypto)
Korea’s Income Tax Act Article 17 (Dividend Income) was amended on 31 Dec 2024 to name fractional-investment and token-security income explicitly as dividend income, effective for income arising on or after 1 July 2025 — in force in 2026. This puts it in a completely different regime from virtual assets (crypto), whose taxation is still debated as other/capital-gains income.
Two clauses do the work. Article 17(1) item 5-3 covers "profit from a beneficiary certificate representing the beneficial right under a trust of non-monetary property" — the non-monetary trust beneficiary certificate used for real-estate and copyright fractional investment. Article 17(1) item 5-4 covers "profit from an investment contract security under Article 4(6) of the Capital Markets Act" — the investment contract security used for art, cattle, and luxury-goods fractional investment. Item 9 sweeps in similar profit-sharing income.
- Non-monetary trust beneficiary certificate (Capital Markets Act Art. 4(5)) → dividend income (Income Tax Act Art. 17(1) 5-3).
- Investment contract security (Capital Markets Act Art. 4(6)) → dividend income (Income Tax Act Art. 17(1) 5-4).
- Real-estate rent distributions, music royalty shares, art/cattle liquidation proceeds are all dividend income.
15.4% withholding
Dividend income is withheld at source. Under Income Tax Act Article 129(1) item 2-b, the withholding rate for "other dividend income" is 14%, and a local income tax equal to 10% of that (1.4%) is added, for a combined 15.4%. So on KRW 10 million of distributions and redemption gains, KRW 1.54 million is withheld.
If your total interest + dividend income for the year is KRW 20 million or less, this 15.4% withholding settles your liability with no filing required.
- Withholding = dividend income × 14% (income tax) + 10% of that (local tax) = dividend income × 15.4%.
- Distributions (rent, royalties, settlements) and redemption/liquidation gains are added together as dividend income.
Financial-income aggregate taxation (KRW 20 million)
When your yearly interest + dividend income exceeds KRW 20 million (Income Tax Act Article 14(3) item 6), you become subject to financial-income aggregate taxation: the excess is combined with your other global income (employment, business, etc.) and taxed at the 6–45% progressive rates.
Article 62 then applies comparative taxation: the tax is the GREATER of (1) the comprehensive method — KRW 20 million × 14% plus progressive tax on (the excess over 20 million + your other tax base) — and (2) the separate method — all financial income × 14% plus progressive tax on your other tax base. If a fractional-investment payout is the income that tips you over KRW 20 million, the extra tax can be larger than expected, so check it before you cash out.
- KRW 20 million or less: 15.4% withholding is final, no filing.
- Over KRW 20 million: file global income tax the following May; comparative tax (Art. 62) applies.
- The calculator shows the marginal tax the fractional-investment payout adds by comparing the tax with and without it.
No dividend gross-up
Ordinary listed-stock dividends receive an 11% gross-up and a dividend tax credit to relieve double taxation with corporate tax. Fractional-investment dividends (Article 17(1) 5-3 and 5-4) are NOT within the gross-up list of Article 17(3), so there is no gross-up and no dividend tax credit. Under aggregate taxation they bear the progressive rate with no credit cushion. This calculator therefore applies no gross-up to fractional-investment dividends.
Securities transaction tax exempt; secondary gains
Securities transaction tax applies only to the transfer of "shares or equity interests" (STT Act Article 2). Investment contract securities and non-monetary trust beneficiary certificates are not "shares/equity" as defined in STT Act Article 1-2, so their transfer is exempt from securities transaction tax (unlike listed stock at roughly 0.15–0.20%).
Separately, capital gains from reselling these securities to other investors on a secondary over-the-counter platform have no explicit charging provision under current income tax law. The financial investment income tax (which would have taxed such gains) was scheduled for 2025 but repealed, leaving a gap. Note that habitual, continuous trading can be treated as business income, and future legislation may close the gap — so keep your trade records. The calculator treats secondary trading gains as untaxed (KRW 0) and flags this.
- Investment contract securities / trust beneficiary certificates: securities transaction tax exempt.
- Secondary-market resale gains: no explicit tax provision currently (kept at 0), but keep records.
How to read the result
Choose the security type (investment contract security or non-monetary trust beneficiary certificate) and the underlying asset, then enter your principal, periodic distributions, redemption/liquidation gains, any secondary-market trading gains, the holding period, your other financial income (to test the KRW 20 million threshold), and your other taxable-income base (for the marginal rate). The result shows the 15.4% withholding, whether you enter aggregate taxation, the comparative-tax outcome and the extra tax the payout adds, the securities-transaction-tax exemption, and your after-tax net profit and annualized return.
This is a planning estimate based on 2026 Korean rules, not tax advice or an official assessment. Actual tax depends on the product structure and your overall income; confirm with a licensed tax professional before filing.
This calculator is based on Korean rules (2026): income from fractional investment and tokenized securities is dividend income (Income Tax Act Article 17(1) items 5-3 and 5-4), withheld at 14% + 1.4% local = 15.4% (Article 129(1) item 2-b), pulled into financial-income aggregate taxation above KRW 20 million with comparative tax (Articles 14(3)6 and 62), given no dividend gross-up (Article 17(3)), and exempt from securities transaction tax because such securities are not shares/equity (Securities Transaction Tax Act Articles 2 and 1-2). Secondary-market resale gains currently have no explicit charging provision. Figures are planning estimates, not tax advice or an official assessment; confirm current Korean rules with a licensed tax professional before filing, paying, or investing.