SECURITIES TRANSACTION TAX ACT
Act No. 3104, Dec. 5, 1978
Amended by Act No. 4670, Dec. 31, 1993
Act No. 5156, Aug. 14, 1996
Act No. 6302, Dec. 29, 2000
Act No. 7324, Dec. 31, 2004
Act No. 8139, Dec. 30, 2006
Act No. 8838, Jan. 9, 2008
Act No. 9274, Dec. 26, 2008
Act No. 10401, Dec. 27, 2010
Act No. 11615, Jan. 1, 2013
Act No. 11845, May 28, 2013
Act No. 11873, jun. 7, 2013
Act No. 13628, Dec. 29, 2015
Act No. 14096, Mar. 22, 2016
Act No. 15229, Dec. 19, 2017
Act No. 16111, Dec. 31, 2018
Act No. 16837, Dec. 31, 2019
Act No. 17655, Dec. 22, 2020
The purpose of this Act is to contribute to facilitating the raising of financial revenue by imposing appropriate taxation on the transfer of share certificates or portions.
[This Article Newly Inserted on Dec. 29, 2015]
[Previous Article 1 moved to Article 2 <Dec. 29, 2015>]
| Article 1-2 (Definitions) |
| (1) | The term "share certificate" in this Act means the following: |
| 1. | A share certificate of a corporation established under the Commercial Act or other special Acts; |
| (2) | The term "portion" in this Act means a certain share of a partner or member of an unlimited partnership, limited partnership, limited liability company, and limited company established pursuant to the Commercial Act. |
| (3) | The term "transfer" in this Act means that the ownership is transferred at a cost by contract or legal causes. |
| (5) | In applying this Act, the terms of a resident, non-resident, domestic corporation, foreign corporation, domestic business place of a non-resident and foreign corporation, shall have the same meaning as those used in the Income Tax Act and the Corporate Tax Act. |
[This Article Wholly Amended on Dec. 29, 2015]
[Moved from Article 2 <Dec. 29, 2015>]
| Article 2 (Taxable Objects) |
The securities transaction tax shall be imposed on the transfer of share certificates or portions (hereinafter referred to as "share certificates, etc.") under this Act: Provided, That where the transfer of share certificates, etc. falls under any of the following cases, no securities transaction tax shall be levied:
| 1. | Where share certificates, etc. listed on a foreign market (limited to the market prescribed by Presidential Decree; hereafter referred to as "foreign securities market" in this Article), which is similar to the securities market, are transferred; |
[This Article Wholly Amended on Dec. 29, 2015]
[Moved from Article 1; previous Article 2 moved to Article 1-2 <Dec. 29, 2015>]
Any of the following persons shall be the taxpayer of securities transaction tax: <Amended on Mar. 22, 2016>
| (a) | Share certificates transferred in the securities market; |
| (b) | Share certificates transferred outside the securities market by a method prescribed by Presidential Decree; |
| 3. | The transferor of the relevant share certificates, etc., where share certificates, etc. are transferred by means of other than those provided in subparagraphs 1 and 2: Provided, That where a non-resident or foreign corporation that does not have any domestic business place in Korea transfers share certificates, etc., not through any financial investment business entity, the transferee of such share certificates, etc. shall be the taxpayer. |
[This Article Wholly Amended on Dec. 29, 2015]
| Article 4 (Place of Tax Payment) |
| (1) | The place where the securities transaction tax is to be paid shall be as follows: |
| 1. | The location of each business place of the relevant taxpayer, in cases referred to in subparagraphs 1 and 2 of Article 3: Provided, That the location of the head office or principal offices may be the place of tax payment for the securities transaction tax in cases prescribed by Presidential Decree; |
| 2. | The following classifications, in cases referred to in subparagraph 3 of Article 3: |
| (a) | If the taxpayer is a resident, his/her domicile: Provided, That if he/she has no domicile, it shall be his/her residence; |
| (b) | If the taxpayer is a domestic corporation, the location of its head or principal office recorded in the register; |
| (c) | If the taxpayer is a non-resident or foreign corporation and has a domestic business place, the location of its domestic business place (if there are two or more domestic business places, the principal one); |
| (d) | If the taxpayer is a non-resident or foreign corporation and has no domestic business place, the location of the head or principal office of the corporation that has issued the share certificate, etc. subject to the securities transaction taxation. |
| (2) | If the place of tax payment is not clear, it shall be determined by Presidential Decree. |
[This Article Wholly Amended on Dec. 29, 2015]
| Article 5 (Time of Transfer) |
| (1) | In applying this Act, the time for transfer of a share certificates, etc. shall be the time when the relevant transactions are settled. |
| (2) | Matters necessary for settlement of transactions under paragraph (1) shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Dec. 29, 2015]
| Article 6 (Non-taxable Transfer) |
No securities transaction tax shall be levied in any of the following cases:
| 1. | Where the State or local government transfers the share certificates, etc.: Provided, That the foregoing shall not apply to cases of transferring share certificates, etc. acquired from the fund which is established pursuant to Acts prescribed in attached Table 2 of the National Finance Act and whose management entity is the head of a central administrative agency, and to cases where an agency in overall charge of postal services under subparagraph 2 of Article 2 of the Act on Special Cases concerning the Management of Postal Services transfers share certificates, etc.; |
| 3. | Where share certificates, etc. determined by Presidential Decree, other than cases referred to in subparagraphs 1 and 2, are transferred. |
[This Article Wholly Amended on Dec. 29, 2015]
| (1) | The tax base of the securities transaction tax shall be classified as follows: <Amended on Dec. 22, 2020> |
| 1. | The sum of the transfer value of relevant share certificates, where the share certificates referred to in each item of subparagraph 1 of Article 3 are transferred; |
| 2. | The value of the following classifications, where the share certificates, etc. other than those provided in subparagraph 1 are transferred: |
| (a) | Where the transferred values of share certificates, etc. are known: the transferred values of relevant share certificates, etc.: Provided, That in any of the following cases, the values prescribed as follows shall apply: |
| (b) | Where the transferred values of share certificates, etc. are unknown: The value assessed by means of the assessment of transferred values prescribed by Presidential Decree. |
| (2) | Matters necessary for computing the market price and normal price in applying of the provisions of paragraph (1) shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Dec. 29, 2015]
| (1) | The tax rate of the securities transaction tax shall be 35/10,000: Provided, That the tax rate of the securities transaction tax shall be 43/10,000 from January 1, 2021 to December 31, 2022. <Amended on Dec. 22, 2020> |
| (2) | If deemed urgently needed to support the development of the capital market, the tax rate referred to in paragraph (1) may be reduced or set at zero percent, by type, only among the share certificates traded on the securities market as prescribed by Presidential Decree. |
[This Article Wholly Amended on Dec. 29, 2015]
| Article 9 (Transaction Collection) |
| (1) | Any taxpayer under subparagraphs 1 and 2 of Article 3 and the proviso to subparagraph 3 of the said Article shall collect from the transferor of the share certificates, etc. the securities transaction tax, which is calculated by applying the tax rate prescribed in Article 8 to the tax base prescribed in Article 7, when transaction of share certificates, etc. is settled, or when share certificates, etc. are transferred. |
| (2) | Where transactions of share certificates, etc. have been concluded in the securities market, the designated Exchange shall notify an electronic registry by the day after the transaction day of the matters prescribed by Presidential Decree, such as type and quantity of share certificates, so that the electronic registry can determine the tax base under paragraph (1). <Amended on Mar. 22, 2016> |
[This Article Wholly Amended on Dec. 29, 2015]
| Article 9-2 (Submission of Details of Transfer between Securities Accounts) |
Where a taxpayer falling under subparagraph 3 of Article 3 transfers share certificates, etc. via the securities account under the control of a financial investment business entity, the financial investment business entity shall submit the details of transfer, etc. between the securities accounts of the relevant transaction to the head of the competent tax office within two months from the last day of the quarter to which the transfer date belongs. In such cases, necessary matters, such as the details of transfer, shall be determined by Presidential Decree. [This Article Wholly Amended on Dec. 29, 2015]
| Article 10 (Tax Return, Payment and Refund) |
| (1) | A taxpayer of securities transaction tax shall file a return of tax base and tax amount according to the following classifications with the head of a competent tax office as prescribed by Presidential Decree: <Amended on Dec. 19, 2017> |
| 1. | To file a return of tax base and tax amount of each month by tenth of the next month in cases referred to in subparagraphs 1 and 2 of Article 3; |
| 2. | To file a return of tax base and tax amount of each half year within two months from the last day of the half year to which the transfer date belongs in cases referred to in subparagraph 3 of Article 3. |
| (2) | The taxpayer shall pay to the tax office having jurisdiction over the tax payment place, the Bank of Korea (including its agents) or the postal offices the securities transaction tax for the relevant month or for the relevant half year as prescribed by Presidential Decree, while he/she files a return as provided in the subparagraphs of paragraph (1). <Amended on Dec. 19, 2017> |
| (3) | Where there exists any excessive or wrong payment in the securities transaction tax paid under paragraph (2) by the taxpayer specified in subparagraph 1 of Article 3, so the refund is to be made to the transferor of the share certificates, etc., it may be refunded by adjusting the securities transaction tax amount to be paid by the relevant taxpayer through transaction collection. |
| (4) | Matters necessary for the requirements, etc. of the refund under paragraph (3) shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Dec. 29, 2015]
| Article 10-2 (Consolidated Tax Return and Payment at Main Office) |
Where a taxpayer of securities transaction tax is a per-business unit taxable entrepreneur under the latter part of Article 8 (3) of the Value-Added Tax Act, he/she may file a return and pay en masse at the main office or principal place of business, notwithstanding Article 4 (1) 1, and Article 10 (1) and (2). [This Article Wholly Amended on Dec. 29, 2015]
| (1) | If no return is made on the tax base and tax amount under Article 10, or any error or omission is found in the contents of return, the head of a competent tax office may investigate such tax base and tax amount, and determine or adjust both of them. |
| (2) | In making a decision or adjustment under paragraph (1), it shall be based on books and other documentary evidence: Provided, That if it is not possible to be based upon books or other documentary evidence and it is prescribed by Presidential Decree, such decision or adjustment may be based on the estimation. |
| (3) | If an error or omission is discovered in the tax base and tax amount decided or adjusted under paragraphs (1) and (2), the head of a competent tax office shall readjust it immediately. |
[This Article Wholly Amended on Dec. 29, 2015]
| Article 12 (Occasional Imposition) |
Notwithstanding the provisions of Article 10, when a taxpayer suspends or discontinues his/her business, or when it is deemed that he/she might evade the securities transaction tax, the head of a competent tax office may investigate and decide his/her tax base and tax amount at any time. In this case, Article 11 (2) shall apply mutatis mutandis. [This Article Wholly Amended on Dec. 29, 2015]
If a taxpayer for the securities transaction tax fails to pay the tax amount, or pays less than the amount for which a tax return was filed earlier, the head of a competent tax office shall collect the unpaid or insufficient tax amount, and if a decision, adjustment, or occasional imposition is made under Article 11 or 12, the payable tax amount. [This Article Wholly Amended on Dec. 29, 2015]
| Article 14 Deleted. <Dec. 30, 2006> |
| Article 15 (Keeping of and Entry into Books) |
| (1) | A corporation who is a taxpayer for the securities transaction tax shall keep books relating to its business, and record thereon the type, quantity, transaction amount of share certificate, etc. and other matters prescribed by Presidential Decree. |
| (2) | Books referred to in paragraph (1) shall be preserved for five years from the date on which the tax return is filed. |
[This Article Wholly Amended on Dec. 29, 2015]
| Article 16 (Matters to be Ordered) |
Where deemed necessary for assuring the payment of the securities transaction tax, the Government may order any taxpayer and financial investment business entity to observe matters necessary to keep control over transactions (including transfers corresponding to the provisions of Article 9-2), non-taxable transfers, etc. of share certificates, etc. as prescribed by Presidential Decree. [This Article Wholly Amended on Dec. 29, 2015]
| Article 17 (Question and Inspection) |
Any tax official, who is engaged in affairs concerning the securities transaction tax, may ask a taxpayer and his/her counterpart of the transaction regarding the matters in relation to the securities transaction tax, or inspect books, documents or other things pertaining to his/her affairs. In such cases, he/she shall not abuse his/her authority for any purposes, etc. out of the scope necessary for performing his/her duties. <Amended on Dec. 31, 2018>
[This Article Wholly Amended on Dec. 29, 2015]
| Article 18 Deleted. <Aug. 14, 1996> |
ADDENDA <Act No. 3104, Dec. 5, 1978>
| (1) | (Enforcement Date) This Act shall enter into force on the date of its promulgation. |
| (2) | (Applicability) This Act shall apply beginning with the first share certificates, etc. transferred after January 1, 1979. |
ADDENDA <Act No. 4670, Dec. 31, 1993>
| (1) | (Enforcement Date) This Act shall enter into force on January 1, 1994. |
| (2) | (Applicability) This Act shall apply beginning with the first share certificates, etc. transferred after this Act enters into force. |
| (3) | (Transitional Measures) Any securities transactions tax which has been, or is to be, levied pursuant to the previous provisions at the time this Act enters into force, shall be subject to the previous provisions. |
ADDENDA <Act No. 5156, Aug. 14, 1996>
| (1) | (Enforcement Date) This Act shall enter into force on the date of its promulgation. |
| (2) | (Applicability) This Act shall apply beginning with the first share certificates, etc. transferred after this Act enters into force. |
ADDENDA <Act No. 6302, Dec. 29, 2000>
| (1) | (Enforcement Date) This Act shall enter into force on January 1, 2001. |
| (2) | (General Applicability) This Act shall apply starting with the first share certificates, etc. transferred after this Act enters into force. |
| (3) | (Applicability to Non-Taxable Transfer) The amended provisions of subparagraph 3 of Article 6 shall apply beginning with the first acceptance by the underwriter after this Act enters into force. |
| (4) | (General Transitional Measures) With respect to the securities transaction tax levied or to be levied under the previous provisions at the time of enforcement of this Act, the previous provisions shall apply. |
ADDENDA <Act No. 7324, Dec. 31, 2004>
| (1) | (Enforcement Date) This Act shall enter into force on January 1, 2005. |
| (2) | (General Applicability) This Act shall apply starting with the first share certificates, etc. transferred after this Act enters into force. |
| (3) | (General Transitional Measures) With respect to the additional tax levied or to be levied under the former provisions at the time of enforcement of this Act, the former provisions shall apply. |
ADDENDA <Act No. 8139, Dec. 30, 2006>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2007. (Proviso Omitted.)
Articles 2 through 15 Omitted.
Article 16 (Transitional Measures for Amendment to Other Acts)
An additional tax that was imposed or is to be imposed pursuant to the provisions of any of the following tax-related Acts before this Act enters into force, shall be governed by the former provisions of the corresponding tax-related Act, notwithstanding the corresponding tax-related Act amended under Article 15 (1) through (7) of the Addenda:
ADDENDA <Act No. 8838, Jan. 9, 2008>
| (1) | (Enforcement Date) This Act shall enter into force on April 1, 2008. |
| (2) | (General Applicability) This Act shall apply beginning with the first share certificate transferred after this Act enters into force. |
ADDENDA <Act No. 9274, Dec. 26, 2008>
| (1) | (Enforcement Date) This Act shall enter into force on February 4, 2009: Provided, That the amended provisions of Articles 9 (1), 10 and 10-2 shall enter into force on January 1, 2009. |
| (2) | (General Applicability) This Act shall apply beginning with the first share certificate, etc. transferred after this Act enters into force. |
| (3) | (Applicability concerning Consolidated Tax Return and Payment of Securities Transaction Tax at Main Office) The amended provision of Article 10-2 shall apply beginning with the first tax return and payment due after this Act enters into force. |
| (4) | (General Transitional Measures) Former provisions shall apply to the securities transaction tax that has been imposed or is to be imposed under former provisions at the time when this Act enters into force. |
ADDENDA <Act No. 10401, Dec. 27, 2010>
| (2) | (General Applicability) This Act shall apply beginning with the first share certificates, etc. transferred on or after the date this Act enters into force. |
ADDENDA <Act No. 11615, Jan. 1, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2013.
Article 2 (General Applicability)
This Act shall apply beginning with share certificates, etc. transferred after this Act enters into force.
Article 3 (Applicability to Portion of Limited Liability Company)
The amended provisions of Article 2 (2) shall apply beginning with the portion of a limited liability company transferred after January 1, 2013. Article 4 (Applicability to Submission of List of Transfer, etc. between Securities Accounts)
The amended provisions of Article 9-2 shall apply beginning with share certificates or portions transferred after January 1, 2013. Article 5 (General Transitional Measures)
The securities transaction tax which has been levied or is to be levied pursuant to the previous provisions at the time this Act enters into force shall be governed by the previous provisions.
Article 6 (Relationship with other Acts)
A citation of a provision of the Securities Transaction Tax Act in force at the time this Act enters into force shall be deemed a citation of this Act or the corresponding provisions hereof in lieu of the former provisions, if such corresponding provision exists herein.
ADDENDA <Act No. 11845, May 28, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 17 Omitted.
ADDENDA <Act No. 11873, Jun. 7, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2013.
Articles 2 through 19 Omitted.
ADDENDUM <Act No. 13628, Dec. 29, 2015>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 14096, Mar. 22, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on the date prescribed by Presidential Decree within the scope not exceeding four years from its promulgation.
Articles 2 through 11 Omitted.
ADDENDA <Act No. 15229, Dec. 19, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2018.
Article 2 (Applicability to Report and Payment of Tax Base and Tax Amount of Securities Transaction Tax)
The amended provisions of Article 10 (1) 2 and paragraph (2) of the same Article shall begin to apply from share certificates, etc. transferred after this Act enters into force.
ADDENDUM <Act No. 16111, Dec. 31, 2018>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 16837, Dec. 31, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 2020.
Article 2 (Applicability to Reduction of Tax Rate)
The amended provisions of Article 8 (1) shall begin to apply to share certificates, etc. transferred after this Act enters into force.
ADDENDA <Act No. 17655, Dec. 22, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2021.
Article 2 (Applicability to Reduction of Tax Rate)
The amended provisions of Article 8 (1) shall begin to apply to share certificates, etc. transferred after this Act enters into force.