A 12% target distribution rate on a covered call ETF is a goal, not a guaranteed return. When total return falls short of the payout rate, principal erodes — and tax alone drains 1.85 percentage points a year.
From January 1, 2026, capital reserve dividends are taxable for major shareholders of listed firms and all shareholders of unlisted firms. Only the portion above your acquisition cost counts as dividend income — below it, your cost basis shrinks instead.
Dividends from public Korean REITs can be taxed at 9.9% instead of 15.4%. The cap applies to 50 million won of principal, only dividends paid within three years qualify, and you must file with your broker — no retroactive relief.
US dividends lose 15% at source and nothing more in Korea — lighter than the 15.4% on Korean dividends. The real split comes at 20 million won of annual financial income.
A cash dividend is taxed at 15.4% on arrival; a share cancellation shrinks the share count with no tax at all. Here is the arithmetic behind a 3.3% cancellation lifting EPS by 3.4%, plus a side-by-side after-tax table.
Korea's proposed Productive-Finance ISA exempts all interest and dividend income from domestic stocks and funds. 20 million won a year, up to 10 years, starting 2027. On 15 million won of dividends over three years, the tax gap runs from 2.31 million won to zero.
Only financial income above 20 million won gets rolled into comprehensive taxation, but health insurance starts counting at 10 million won. A 1-million-won difference can create 480,000 won a year in premiums.
Dividends from US stocks are withheld once at 15% with nothing added in Korea. Chinese dividends face an extra 4.4% at home. Here is the full arithmetic on 10 million won of dividends — and what changes above the 20 million won threshold.
Domestic dividends start with 15.4% withholding; above 20 million won they roll into comprehensive taxation. From 2026, high-dividend companies add a third track at 15.4–33%. Rate tables and examples break down all three paths.