Taxes6 分で読めます

ISA Tax Exemption and Separate Taxation in Detail

Whether it's deposit interest or gains on stocks and funds, if you just leave it as is, a 15.4% tax attaches—so why does tax shrink dramatically when you run the same money inside an ISA? Let's dissect the tax exemption and separate taxation structure of the ISA.

What Kind of Account Is an ISA?

An ISA (Individual Savings Account) is a "tax-saving basket" that lets you hold and run various products such as deposits, funds, ETFs, and domestic stocks in a single account, and gives tax benefits on the gains earned within it.

In an ordinary account, 15.4% (income tax 14% + local tax 1.4%) is automatically deducted from interest and dividends. By contrast, when you terminate an ISA (withdraw at maturity), it calculates tax only on the net gain earned during that time.

Another important advantage is "gain-loss netting." If you made 1 million won on product A and lost 400,000 won on product B, the ISA taxes only the net gain of 600,000 won by combining the two. In an ordinary account, the 1 million won gain is taxed and the 400,000 won loss simply ends as your own loss.

Tax-Exemption Limits by Type

ISAs are divided into three types by the subscriber's conditions, and the tax-exemption limits differ.

General type: Up to 2 million won of net gain is tax-exempt. You can subscribe if you are 19 or older with no income condition (or 15–19 with earned income).

Low-income type: Up to 4 million won of net gain is tax-exempt. Eligible are those with total salary of 50 million won or less in the previous year, or comprehensive income of 38 million won or less.

Farmer/fisher type: Up to 4 million won of net gain is tax-exempt. Eligible are farmers/fishers with comprehensive income of 38 million won or less.

So even for the same gain, the low-income and farmer/fisher types are advantageous, with a tax-exempt band twice as wide. Checking your own income condition before subscribing is the first step.

These figures are based on current tax law as of July 2026. For several years the government and National Assembly have discussed a reform to raise the tax-exemption limits to 5 million won (general) and 10 million won (low-income), and the contribution limit to 40 million won per year and 200 million won in total, but as of July 2026 legislation has not been finalized. The tax regime may be revised, so be sure to check the latest conditions at the time you subscribe.

What If You Exceed the Tax-Exemption Limit? 9.9% Separate Taxation

Net gains exceeding the tax-exemption limit (2 million won general, 4 million won low-income) carry a 9.9% rate (income tax 9% + local income tax 0.9%). This is called "separate taxation."

Compared with the 15.4% of an ordinary account, the rate itself is lower. For example, if a general-type ISA earned a net gain of 5 million won, the first 2 million won is tax-exempt, and only the remaining 3 million won carries 9.9%, about 297,000 won in tax.

Had you earned the same 5 million won in an ordinary account, the tax would be 5 million won × 15.4% = 770,000 won, so the ISA pays about 470,000 won less.

"Separate taxation" means this gain is not combined with other income and is settled by deducting only this rate. So even if your financial income is large, you can avoid the burden of the rate jumping by moving to comprehensive taxation.

The 9.9% applies only to the "portion exceeding the limit." It is not that 9.9% attaches to the entire net gain—only the part exceeding the tax-exemption limit is subject.

Contribution Limit and the 3-Year Mandatory Holding

The ISA has a set limit on how much money you can put in. You can contribute up to 20 million won per year and up to 100 million won over 5 years. Any limit you didn't use this year carries over to the next year.

To receive the benefits in full, you must maintain the account for at least 3 years (the mandatory holding period). If you fail to complete 3 years and terminate, the tax-exemption/separate-taxation benefits received during that time disappear, and it is settled as if 15.4% had been levied on interest and dividends like an ordinary account.

However, the principal (the money you put in) can be withdrawn mid-term even within 3 years. Since withdrawing does not restore your total contribution limit, filling it with spare money you can leave untouched for 3 years or more suits the ISA's intent better than using it for emergency cash.

There is also a linked system in which, after maturity (3 years or more), you can terminate and move the funds into a pension account (pension savings/IRP) to receive an additional tax deduction.

よくある質問

Q. If I take a loss inside the ISA, is there no tax?

Correct. The ISA taxes only the account's overall net gain (gains − losses). If at maturity you have a net loss or the net gain is within the tax-exemption limit, the tax is zero. However, the ISA is also an investment account, so principal loss can occur, and the tax benefit does not prevent losses. Remember that the risk of the products held remains the same.

Q. Between general and low-income types, is the low-income type always better?

It's true that the low-income type is advantageous when you qualify, since its tax-exemption limit is twice as wide. But to subscribe to the low-income type you must meet the previous year's income condition (total salary of 50 million won or less, etc.). If you don't qualify, you subscribe to the general type. Rather than "always," it's a matter of choosing to fit your own income requirements.

Q. How can I see the tax difference between an ISA and an ordinary account at a glance?

For the same gain, an ordinary account is a fixed 15.4%, while the ISA is tax-exempt up to the limit and then only 9.9% on the excess. Considering gain-loss netting as well, the gap widens further. On our site's fees and taxes page, you can visually check how much tax eats into long-term returns.