The government said on the 9th it will roll out a new individual savings account (ISA) focused on investing in Korea's stock market. An ISA lets investors put money into various financial products through a single account while receiving tax benefits. While existing ISAs can invest in offshore equity funds holding U.S. stocks or exchange-traded funds (ETFs) that track U.S. stock indexes, the new ISA can invest only in domestic stocks and corporations.
The new ISA is expected to apply either a higher tax-exempt cap (4 million won) than the existing ISA or a higher separate tax rate (9.9%) on excess revenue. People who already have an existing ISA can also enroll in the new ISA concurrently.
◇ New ISA focused on domestic stocks... more benefits for young people
On the day, the Ministry of Economy and Finance said in the "2026 economic growth strategy" that it will create a new "productive finance ISA" this year. The productive finance ISA is a product that invests in domestic stocks and domestic equity funds, as well as the Public Growth Fund and business development company (BDC) vehicles created under government leadership. The Public Growth Fund is a plan for the government to raise 150 trillion won over five years to invest in advanced industries that require large-scale funding—such as artificial intelligence (AI), biotech, and robotics—and in corporations. A BDC is a fund that invests in unlisted domestic startups or ventures.
The "productive finance ISA" will launch in two types—youth ISA and Public Growth ISA—and investors can enroll in only one of the two. The youth ISA is limited to those age 34 or younger with total annual pay of 75 million won or less. The government decided to grant income deductions for a set portion of deposits into the youth ISA and to cut taxes on interest and dividends income. The Public Growth ISA is open regardless of age or income.
◇ No taxes even when gains arise from selling treasury shares
The ministry also said it will prepare a tax rationalization plan that does not levy taxes on cash generated when corporations sell treasury shares. The Democratic Party of Korea is pushing the third amendment to the Commercial Act to mandate cancellation of treasury shares. The party plans to pass the bill at the National Assembly's plenary session this month. Under current tax law, if treasury shares are bought cheaply and sold at a higher price, taxes must be paid.