South Korea Unveils Productive Finance ISA with Full Tax Exemption on Dividends, Limits Existing Account to 5 Years

According to South Korea's Ministry of Economy and Finance, on August 3, the government introduced a new Productive Finance ISA (Individual Savings Account) offering full tax exemption on interest and dividend income from domestic equities and funds, with an annual contribution limit of 20 million won and a total cap of 200 million won.

Simultaneously, the government tightened existing ISA accounts, reducing the contract period from indefinite extension to a maximum of 5 years and eliminating the ability to carry forward unused annual contribution limits starting January 1, 2027. The policy applies to both new and existing account holders.