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Looking at the Ministry of Economy and Finance's 2026 tax reform bill on the 4th, from January next year new general ISA accounts will be limited to a maximum of five years, with a minimum three-year maturity extendable by up to two years. An Individual Savings Account is a tax-saving account that exempts interest and dividend income from domestic stocks and funds up to 2 million won (4 million won for the low-income and farming-fishing type) from tax and applies separate taxation (9.9%) on amounts above the limit. At present it can be extended indefinitely for as long as one wishes, including the minimum three-year mandatory period, while receiving tax benefits. The plan is to limit this to a maximum of five years and settle the tax. A ministry official explained that "there is an aspect of granting excessive benefits through indefinite tax deferral, so this is a matter of normalizing taxation".
The provision carrying over the annual contribution limit (20 million won) will also be abolished. For example, if you contributed only 5 million won this year, the following year you could contribute a total of 35 million won: the new 20 million won limit plus 15 million won carried over from the previous year. From now on, however, if you do not meet the contribution limit in a given year it will not be carried over. A ministry official explained that "the aim is to encourage regular installment investing". The total limit of 100 million won is maintained.
Investors' responses to the change are expected to vary. Those who want to invest in overseas stock ETFs listed domestically can, whether existing or new subscribers, extend a general ISA by several decades within this year and thereby escape the five-year limit. However, since the abolition of the contribution carry-over provision applies to existing subscribers too, it is advantageous to invest in line with the 20 million won limit each year. If you want to build a separate portfolio dedicated to domestic investment, it is good to sign up for the 'productive finance ISA' newly created next year. The productive finance ISA expands the contribution limit to 20 million won a year (200 million won in total) and grants a full tax exemption on interest and dividend income. Its maturity can also be extended to a total of 10 years, including the minimum three years.
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The productive finance ISA is divided into a general type, open to residents aged 19 or over, and a youth type for those aged 34 or under with a total salary of 75 million won or less. The existing ISA provided a tax exemption on net profit up to 2 million won (4 million won for the low-income type), whereas the productive finance ISA grants a tax exemption on the full amount of interest and dividends. On top of that, the youth type also provides an income deduction of 10% of the amount contributed. Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol explained the purpose of the introduction, saying "we will give preferential treatment to young people and contribute to their asset formation".
The existing ISA has a total contribution limit of 100 million won, but in the productive finance ISA it doubles to 200 million won. However, while the existing ISA allowed investment in overseas exchange-traded funds (ETFs) listed domestically, the productive finance ISA can invest only in domestic products. The contribution period is the same at three years, but the productive finance ISA can be extended up to 10 years.
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So they will let us roll with leverage but only 200 million and domestic only!!! Is that it?
No carry-over, plus a forced extra 5 years.
▶ Original source: https://news.nate.com/view/20260804n26840?mid=n0100
▶ Original source: https://news.nate.com/view/20260803n29464
