In a bid to stimulate economic growth and encourage corporate investment, the South Korean government is reportedly gearing up to unveil a set of incentives aimed at boosting dividends.
According to sources, the government plans to introduce a 5% tax credit for companies that increase dividends and treasury stock by more than 5% compared to the average of the previous three years.
For individual investors, the proposal includes a substantial reduction in the tax burden on dividend income. Those receiving dividends of up to KRW 20 million could see their tax rate drop from 14% to 9%. Additionally, there’s a proposed reduction in the maximum tax rate on dividends exceeding KRW 20 million, slashing it from 45% to 25%.
These measures are expected to not only encourage companies to distribute more dividends but also to attract greater investor participation, ultimately driving economic activity and boosting market confidence in South Korea.
