South Korea's Ministry of Economy and Finance published a cross-government overview of “Policies Changing in 2026 That People Can Feel in Their Daily Lives”, consolidating 130 planned changes across ministries. The compilation highlights tax and financial measures for households and investors, new incentives for cultural content production, and operational changes spanning state-asset leasing, tax arrears settlement, procurement and customs. From 1 January 2026, employer-provided childcare allowance becomes tax-free up to KRW 200,000 per month per child for children under six, and the cap on card-spending income deductions increases by KRW 500,000 for taxpayers with one child and by KRW 1 million for those with two or more children, taking the standard cap to KRW 4 million, with smaller increases for those earning over KRW 70 million a year. Arts and physical education academy fees for children in grade two or below become eligible for a 15% education expense tax credit. Capital-market tax changes include introducing separate taxation for dividend income from high-dividend companies at up to 30% and switching the KOSDAQ venture fund deduction limit from a KRW 30 million lifetime cap to an annual investment cap of KRW 20 million per person. The overview also introduces a webtoon production cost tax credit at 10% for large and mid-sized companies and 15% for small and medium enterprises, raises the large-company credit rate for video content production costs to 20%, and cuts state-owned property lease fees for eligible youth and youth start-ups from 5% to 1% in the first half of 2026. Other measures include a National Tax Service programme from March 2026 to extinguish up to KRW 50 million of hard-to-collect income tax and VAT arrears for qualifying subsistence-type delinquent small self-employed persons, expected to cover about 280,000 people and up to KRW 3.4 trillion in arrears, alongside an expansion of pilot public procurement purchases of innovative products to KRW 839 billion in 2026 from KRW 529 billion in 2025 and Korea Customs Service changes to strengthen identity checks for overseas direct purchases from 2 February 2026 and streamline duty refunds for returned items from 1 November 2026.
Ministry of Economy & Finance (South Korea) 2026-01-21
South Korea's Ministry of Economy and Finance publishes 2026 policy changes featuring child tax relief and 30% separate taxation for high-dividend income
South Korea's Ministry of Economy and Finance released a comprehensive overview of 130 policy changes for 2026, focusing on tax and financial measures, cultural content incentives, and operational adjustments. Key updates include tax-free employer-provided childcare allowances, increased card-spending income deductions, new capital-market tax rules, and various tax credits and fee reductions to support households, investors, and businesses.