The Act on Restriction on Special Cases Concerning Taxation (hereinafter the special tax act), which lowers the top rate for separate taxation of dividend income from high-dividend companies to 30%, passed the National Assembly Strategy and Finance Committee on the 30th. It is lower than the government plan (35%) and aims to induce high dividends in line with Lee Jae-myung's national agenda to "revitalize the domestic stock market."
The Strategy and Finance Committee held a tax subcommittee and a full meeting that day and handled bipartisan agreement bills, including the special tax act. Bills on which the parties could not agree will be automatically referred to the plenary session on the 1st of next month under the National Assembly Act. The core is to set two criteria for high-dividend companies as follows: ▲ dividend payout ratio (dividends as a share of net income) of 40% or higher, or ▲ dividend payout ratio of 25% and an increase of 10% or more from the previous year.
It also applies separate taxation rates of ▲ 14% for dividend income up to 20 million won, ▲ 20% for over 20 million won to under 300 million won, ▲ 25% for over 300 million won to under 5 billion won, and establishes a new bracket of ▲ over 5 billion won with a top rate of 30%. The existing government plan applied a top 35% rate to the "over 300 million won" bracket, and this further subdivides the brackets.
In principle, the National Assembly must handle budget-related auxiliary bills that have passed standing committees together with the budget bill by the statutory deadline of the 2nd of next month. However, since bills on which the parties have not yet reached agreement remain, the parties decided to negotiate the budget bill and related bills with the goal of the end of the regular session on the 9th of next month.
Earlier, National Assembly Speaker Woo Won-sik on the 28th designated 16 bills ancillary to the 2026 revenue budget bill and notified the relevant standing committees, including the Strategy and Finance Committee, and the National Assembly's Legislation and Judiciary Committee. Fourteen of the bills under the Strategy and Finance Committee's purview include the special tax act and amendments to the Income Tax Act and the Corporate Tax Act. Among them, the proposal to raise the corporate tax by 1 percentage point and the education tax by 0.5 percentage point failed to reach agreement and were not put on the agenda.