A member of the Democratic Party of Korea, Ando-geol, affiliated with the National Assembly's Strategy and Finance Committee, suggested during a full committee meeting on the 6th that 'would it be reasonable to change the existing stock holding amount criterion per item to a total stock holding amount criterion for establishing a reasonable tax standard?' regarding the recently controversial criteria for high stock holders under the capital gains tax.
On that day, Representative And noted that 'due to the tax standard of 1 billion won per item, there is a recurring problem of stock trading at the end of the year to avoid the threshold,' and said this. He further explained that 'after the criteria for major shareholders were dramatically raised from 1 billion won to 5 billion won in 2023, net selling has increased.' He stated that the correlation between the changes in major shareholder requirements and year-end net selling is unclear.
In addition, Representative And also disclosed an analysis of 'the actual stock holding distribution' based on data received from the Korea Securities Depository for the end of 2024, based on KOSPI listed companies.
According to Representative And, currently there are 2,000 individuals holding over 5 billion won per item, with an average of 8.33 billion won held per item. There are 11,000 individuals holding between 1 billion won and 5 billion won, and their average holding amount is about 1.9 billion won. Representative And stated, 'When setting the tax standard, careful consideration should be given to what level is deemed a high holder.'
Regarding the separate taxation of dividends, he noted that 'the highest tax rate is on the lower side of expectations, so it needs to be reviewed,' and said, 'the lowest tax rate remains at 14%, the same as before, so consideration should also be given to providing tax benefits to general investors.'
Minister of Economy and Finance Koo Yoon-cheol positively responded, saying, 'I will review the option of changing from a 1 billion won per item to a total stock holding amount criterion on a practical level.'
He explained, 'Currently, for those holding less than 20 million won, a tax rate of 14% is applied, but there is a benefit where the separate tax rate decreases upon joining an Individual Savings Account (ISA),' and said, 'I will actively promote this system so that taxpayers can receive the tax benefits.'
Minister Koo stated, 'For amounts over 300 million won, a tax rate of 45% applies when combined for taxation; however, there have been opinions suggesting it be lowered to 25%, but it was set at 35%, which is lower than combined taxation.'