Article 88-5 (Tax Special Treatment on Contributions to Cooperatives, etc.)

Notwithstanding paragraph (1), for dividend income, etc. arising from contributions made by residents falling under subparagraph 1 of the same paragraph from January 1, 2026, to December 31, 2028, income tax shall not be imposed. For dividend income, etc. arising from contributions made on or after January 1, 2029, the withholding tax rate shall be applied according to the classifications in the following subparagraphs, notwithstanding Article 129 of the Income Tax Act, and such dividend income, etc. shall not be included in the comprehensive income tax base as referred to in Article 14(2) of the same Act. <Newly inserted by Act No. 20728, Dec. 23, 2025> 1. Residents: Shall fall under any of the following subparagraphs. a. Be a member of a cooperative as prescribed by Presidential Decree. b. As a resident other than the one referred to in item a, meet the income criteria specified in any of the following. 1) A resident whose total salary in the immediately preceding taxable period was 70 million won or less (limited to those who only had earned income in the immediately preceding taxable period, or had earned income and comprehensive income not subject to inclusion in the comprehensive income tax base). 2) A resident whose comprehensive income amount subject to inclusion in the comprehensive income tax base in the immediately preceding taxable period was 60 million won or less (excluding those who had earned income exceeding 70 million won in total salary in the immediately preceding taxable period). 2. Withholding tax rate. a. Dividend income, etc. arising from contributions made from January 1, 2029, to December 31, 2029: 5 percent. b. Dividend income, etc. arising from contributions made on or after January 1, 2030: 9 percent.