How dividend tax works in South Korea
A Korean individual receiving an ordinary dividend commonly suffers 14% national withholding and 1.4% local income tax, producing a 15.4% source-tax rate. The withholding is not always the final tax for a resident with substantial financial income.
Interest and dividend income are combined for the financial-income test. When the total exceeds KRW 20 million for the year, the income is generally included in the resident's comprehensive income-tax return and taxed at progressive national rates, with local income tax added.
A resident below the KRW 20 million threshold may generally treat the domestic withholding as final for that income, subject to the type of payment, foreign income, tax-exempt products and other statutory rules. Foreign dividends can still require reporting and foreign-tax-credit analysis.
Dividends paid by a Korean company to a non-resident individual or foreign corporation are generally subject to domestic withholding, commonly 20% nationally for dividends, plus local income tax where applicable. A tax treaty can limit the rate if beneficial ownership, residence certification and procedural requirements are satisfied.
A Korean corporate shareholder is not taxed like an individual. The recipient company's corporate-tax calculation, received-dividend deduction, ownership relationship, payer status and withholding treatment must be reviewed together.
The August 2026 tax-revision bill proposes special separate-tax treatment for some listed-company shareholder returns and a preferential rate for qualifying BDC dividends. Those measures are proposals and should not be treated as the ordinary current dividend regime.
Tax rates at a glance
- Ordinary resident dividend
- 15.4%Common withholding
- National withholding
- 14%
- Local income tax
- 1.4%
- Financial income above KRW 20m
- 6% - 45% national
- Non-resident domestic dividend
- 20% national
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
InvestorsFoundersShareholdersFamily officesCross-border investors
Watch out for
- 15.4% is the common source-withholding figure, not an unconditional final rate. The KRW 20 million financial-income threshold, foreign dividends, filing choices, tax credits and treaty rules can change the result.
- The KRW 20 million threshold applies to combined interest and dividend income, not to each dividend payment or each brokerage account separately.
- A Korean resident can have Korean reporting obligations for dividends paid through a foreign broker. Foreign withholding and the Korean foreign-tax-credit rules should be documented separately.
- Dividend distributions are made after corporate-level tax. Comparing a Korean company dividend with a foreign company dividend requires modelling both company tax and shareholder tax.
- Special dividend-tax measures in the 2026 tax-revision bill are proposals. They do not replace the ordinary 14% national withholding rule until enacted and effective.
Frequently asked questions
How are dividends taxed in South Korea?
Ordinary dividends are commonly withheld at 14% national tax plus 1.4% local income tax, for a 15.4% source rate. If a resident's combined interest and dividend income exceeds KRW 20 million, the income is generally aggregated and taxed progressively.
What happens when Korean financial income exceeds KRW 20 million?
Combined interest and dividend income above KRW 20 million is generally included in comprehensive global income and taxed using the 6% to 45% national rates, with local income tax added after deductions and credits.
What is the dividend withholding rate for a non-resident?
A Korean-source dividend paid to a non-resident is generally subject to 20% national withholding under domestic law, plus local tax where applicable. A treaty can reduce the rate if its conditions and paperwork are met.