Article 40-2 (Pension Accounts, etc.)

If a subscriber of a pension account meets all of the following requirements, the amount paid into the pension account under Article 59-3(1) of the Act (including amounts deemed paid into the pension account under Article 118-3; hereinafter referred to as "pension insurance premiums") may be considered as such. <Amended by Act No. 11695, Feb. 21, 2014; Act No. 12313, Feb. 3, 2015; Act No. 15369, Feb. 12, 2019; Act No. 16957, Feb. 11, 2020; Act No. 18756, Feb. 28, 2023; Act No. 19177, Feb. 28, 2025; Act No. 19441, Jun. 30, 2025> 1. The amount paid is within the sum of the following amounts (the total cumulative amount paid into pension accounts under subparagraphs c and d shall be limited to 100 million won). In cases where there are two or more pension accounts, the total sum of such accounts shall be considered. Provided, that pension insurance premiums from previous tax periods may not be paid; however, in the case of insurance contracts, pension insurance premiums for the period may be paid up to three years and two months from the end of the month in which the final payment date falls. a. 18 million won per year b. Transfer amount under Article 59-3(3) of the Act [This refers to the amount paid from a comprehensive personal asset management account (hereinafter referred to as "comprehensive personal asset management account") to a pension account, limited to the balance of the comprehensive personal asset management account as of the expiration date of the contract under Article 91-18 of the 「Act on the Regulation of Local Tax Laws」. However, if paid across the previous and current tax periods, it refers to the amount paid from the comprehensive personal asset management account to the pension account, limited to the balance of the comprehensive personal asset management account as of the expiration date of the contract minus the amount paid in the previous tax period.] c. In the case of a resident who sells a house owned in the Republic of Korea (hereinafter referred to as "pension house" in this Article) and acquires another house in replacement (hereinafter referred to as "reduced house" in this Article) or does not acquire a house, the amount paid into the pension account among the amount obtained by subtracting the acquisition price of the reduced house (zero if no house is acquired; hereinafter referred to as "house difference" in this Article) from the selling price of the pension house, provided that all of the following requirements are met: 1) The resident or their spouse is 60 years of age or older as of the date of selling the pension house. 2) As of the date of selling the pension house, the resident and their spouse jointly own only one house in the Republic of Korea. Provided, that if a reduced house is acquired before selling the pension house and the pension house is sold within six months from the acquisition date of the reduced house, it shall be deemed that only one pension house was owned as of the date of selling the pension house. 3) As of the date of selling the pension house, the standard market price of the pension house under Article 99 of the Act is 1.2 billion won or less. 4) The acquisition price of the reduced house is less than the selling price of the pension house (only applicable when a reduced house is acquired). 5) The house difference shall be paid into the pension account of the owner of the pension house within six months from the date of selling the pension house. d. In the case of a resident who sells land or buildings owned in the Republic of Korea (hereinafter referred to as "pension real estate" in this Article) and meets all of the following requirements, the amount paid into the pension account among the amount obtained by subtracting the acquisition price of the pension real estate from the selling price of the pension real estate (zero if the amount is less than zero; hereinafter referred to as "pension real estate capital gain" in this Article): 1) The resident is a recipient of basic pension under Article 2(3) of the 「National Basic Livelihood Security Act」 as of the date of selling the pension real estate. 2) As of the date of selling the pension real estate, the resident and their spouse are members of a household owning one house or a household without a house. 3) The period of owning the pension real estate is 10 years or more as of the date of selling the pension real estate. 4) The pension real estate capital gain shall be paid into the pension account of the owner of the pension real estate within six months from the date of selling the pension real estate. 2. No pension insurance premiums shall be paid after applying for commencement of pension payments (if the commencement date of pension payments is pre-agreed, the agreed commencement date shall apply).

In the formula in subparagraph 3 of paragraph 3, "pension receipt year" means the cumulative number of years added, starting from the tax period in which the first date of pension receipt is possible as the base year. If the pension receipt year is 11 years or more, the formula shall not apply. Provided, that the base year in cases falling under any of the following subparagraphs shall follow the respective subparagraphs. 1. For pension accounts subscribed before March 1, 2013 (including cases where a person who subscribed to the defined benefit retirement pension system under Article 2(8) of the 「Act on the Guarantee of Workers' Retirement Benefits」 before March 1, 2013, retires and the entire retirement income is transferred to a newly established pension account): Year 6. 2. In case of succeeding to a pension account under Article 44(2) of the Act: The deceased's pension receipt year as of the date of death.

When a subscriber of a pension account applies for the commencement of pension receipt or termination of the pension account, the pension account administrator shall submit the pension receipt and termination statement prescribed by the Ministry of Economy and Finance to the head of the competent tax office by the 10th of the following month. <Amended by Act No. 12313, Feb. 3, 2015; Act No. 19673, Dec. 30, 2025>

If a resident pays house difference, etc. into a pension account and subsequently falls under any of the following subparagraphs, the entire amount paid into the pension account from the date of payment shall not be considered as pension insurance premiums. <Newly added by Act No. 18756, Feb. 28, 2023; Act No. 19177, Feb. 28, 2025; Act No. 19441, Jun. 30, 2025> 1. It is confirmed that the requirements under Article 2(1)c or d were not met at the time of paying the house difference, etc. into the pension account. 2. If the resident or their spouse newly acquires a house within five years from the date of paying the house difference into the pension account, and the amount obtained by subtracting the acquisition price of the newly acquired house from the selling price of the pension house is less than the amount paid into the pension account.

Upon receiving the notification under paragraph 9, the pension account administrator shall return to the resident the house difference, etc. paid into the pension account that is not considered pension insurance premiums under paragraph 8, and the amount increased due to its operation performance. In this case, the returned amount shall be deemed a non-pension receipt by the resident. <Amended by Act No. 19039, Feb. 29, 2024; Act No. 19177, Feb. 28, 2025>

When applying paragraph 11, the standard market price under Article 2(1)c3) refers to the standard market price of the entire house, regardless of the ownership share of the house, and when transferring or acquiring ownership shares of a house, the selling price and acquisition price under the same subparagraph 4) and paragraph 8(2) shall be the price for the entire house, calculated according to the method prescribed by the Ministry of Economy and Finance. <Newly added by Act No. 18756, Feb. 28, 2023; Act No. 19441, Jun. 30, 2025; Act No. 19673, Dec. 30, 2025>