Article 26-2 (Scope of Collective Investment Schemes, etc.)

In "collective investment scheme prescribed by Presidential Decree" under Article 17(1)5 of the Act, it means a collective investment scheme that meets all the following requirements. <Amended on Feb. 28, 2025> 1. It shall be a collective investment scheme under the "Capital Markets and Financial Investment Business Act" (excluding the special account of an insurance company under Article 251 of the same Act, but including a trust of money that preserves the principal; hereinafter referred to as "collective investment scheme"). 2. It shall settle and distribute at least once a year from the establishment date of the relevant collective investment scheme. However, profits falling under any of the following subparagraphs may be reserved for distribution, and distribution may be reserved even if profits under Article 242 of the "Capital Markets and Financial Investment Business Act" are less than zero (limited to cases prescribed by the collective investment contract under Article 9(22) of the same Act). a. Profits calculated from the replacement of index constituent stocks or investment in derivatives by an index-tracking collective investment scheme under Article 234 of the "Capital Markets and Financial Investment Business Act" (excluding interest income and dividend income from subparagraph la, but including interest income and dividend income from subparagraphs l and 2). (Hereinafter referred to as "index-tracking collective investment scheme" in this Article) b. Evaluation profits of collective investment property evaluated under Article 238 of the "Capital Markets and Financial Investment Business Act." c. Trading profits of collective investment property according to accounting standards under Article 240(1) of the "Capital Markets and Financial Investment Business Act." d. Interest income and dividend income arising from a collective investment scheme that aims to perfectly track changes in an index based solely on the price of stocks traded on a securities market as an index-tracking collective investment scheme, where dividend income is reinvested according to the proportion of constituent stocks to perfectly track changes in the index. 3. It shall be refunded in money for money entrusted (including cases where assets other than money are entrusted and refunded, and both the entrusted value and the refunded value are expressed in money).

If a collective investment scheme does not meet the requirements of each subparagraph of paragraph (1), it shall be taxed according to the following subparagraphs. <Amended on Feb. 28, 2025> 1. Profits from investment trusts, investment limited partnerships, and investment anonymous partnerships under Article 9(18) of the "Capital Markets and Financial Investment Business Act" shall be taxed as profits of trusts other than collective investment schemes under Article 4(2) of the Act. 2. Profits from investment companies, investment limited liability companies, and investment joint-stock companies under Article 9(18) of the "Capital Markets and Financial Investment Business Act", and private collective investment schemes for institutional investors under Article 9(19)1 of the same Act (including former management participation type private collective investment schemes that continue to exist under Articles 8(1) to (4) of the addenda to the "Capital Markets and Financial Investment Business Act", Act No. 18128, such as private collective investment schemes for institutional investors, private collective investment schemes for corporate financial stability, and private collective investment schemes for startups and venture capital), which do not apply the partnership taxation special measure under Article 100-15 of the "Restriction of Special Taxation Act", shall be taxed as dividends and distributions under Article 17(1)1 of the Act.

For private collective investment schemes under Article 9(19) of the "Capital Markets and Financial Investment Business Act" that meet all the requirements of each subparagraph below, they shall be deemed to apply Article 4(2) of the Act and not as collective investment schemes under paragraph (1), even if they meet all the requirements of each subparagraph of paragraph (1). 1. Cases where the investors consist of one resident (including non-residents and foreign corporations without a domestic place of business; hereinafter the same applies in this Article) or one resident and their special relationships under Article 1(2) to (4) of the Enforcement Decree of the National Tax Basic Act (in cases where the investors are non-residents and foreign corporations without a domestic place of business, it refers to persons in a relationship falling under any of the following). a. Relationship of being a non-resident and their spouse, lineal ascendants and descendants, and siblings. b. Relationship where one party directly or indirectly owns 50 percent or more of the voting shares of the other party. c. Relationship between parties where a third party directly or indirectly owns 50 percent or more of the voting shares of one or both parties, respectively. 2. Cases where investors make de facto decisions on asset management. viii. The calculation of indirect ownership ratios of shares under subparagraphs 1b and 1c of paragraph (7) shall be governed by Article 2(3) of the Enforcement Decree of the International Tax Coordination Act. ix. The calculation method of the tax base for profits from collective investment schemes, etc. shall be prescribed by the Minister of Economy and Finance. <Amended on Dec. 30, 2025>