Three withholding rates on Korean dividends circulate in English-language sources: 15.4 per cent, 22 per cent and 15 per cent. All three are real, and only one of them is yours. Korea withholds 22 per cent from a non-resident by default and applies the treaty rate only if a specific form reaches the withholding agent before the dividend is paid. That form also expires after three years, which is the part almost nobody mentions.
Last verified: 3 August 2026. We cite the procedure and rates below to the Personal Income Tax Act, the Local Tax Act, National Tax Service Form 29-12 with its official filing instruction, and the texts of the Korea–US and Korea–UK conventions. Treaty rates are specific to your country of residence. The figures here are for US and UK resident individuals and do not transfer to other jurisdictions.
Three rates circulate. Only one is yours
Korea taxes dividends at source. Which rate the paying company deducts turns on two questions in sequence: whether Korea treats you as a resident for tax purposes, and, if not, whether anyone has claimed a treaty on your behalf.
| How Korea classifies you | Deducted at source | Composition |
|---|---|---|
| Resident individual | 15.4% | 14% income tax plus local income tax |
| Non-resident, no claim filed | 22% | 20% income tax plus local income tax |
| Non-resident, current claim filed (US or UK resident individual) | 15% | treaty cap; see the local surtax section below |
The 15.4 per cent figure appears constantly in guides written for foreigners, and it is the resident schedule. It does not describe what a non-resident receives. If you have seen 15.4 per cent quoted as the rate on Korean dividends for overseas investors, that is the error.
Residency here is a tax test, not an immigration one
Form 29-12 settles the question on its own face. It asks whether you maintain an address in Korea, whether you have resided there continuously for a year or longer, whether you spent at least 365 days in Korea across the past two years, whether your spouse or children have lived there continuously for a year, whether your job requires you to reside there for a year or longer, and whether you are a Korean government official or a national seconded abroad by a Korean company. Answer yes to any one of them and the form treats you as a resident unless a special reason applies.
The instruction is explicit that holding a foreign nationality or permanent residency does not decide the matter. Two groups are non-residents regardless of the tests: foreign diplomats in Korea with their families, excluding Korean nationals, and US military members or civilian employees covered by Article 1 of the Status of Forces Agreement, with their families.
The treaty rate is not automatic
A treaty caps what Korea may charge. It does not instruct anyone to charge less. Article 156-6(1) of the Personal Income Tax Act and Article 207-8(1) of its Enforcement Decree put the burden on the recipient: a non-resident who wants the reduced rate submits an Application for Entitlement to Reduced Tax Rate on Domestic Source Income, Form 29-12 of the Act’s Enforcement Rules.
What has to reach the withholding agent, and when
The form goes to the withholding agent rather than to a tax office. Its own definition of the filing date makes the direction of travel clear: the filing date is the date on which the withholding agent files the application as received from the beneficial owner. For a portfolio holder the chain runs from you to your broker, custodian or standing proxy, and from there to the company paying the dividend.
On the form you name the treaty, the article, paragraph and subparagraph you rely on, the type of income and the rate you claim, and you sign as beneficial owner. If you have spent any days in Korea, you attach a Certificate of Facts Regarding Immigration Records covering at least the two years before you file. The withholding agent then keeps the application for five years from the day after the withholding due date under Article 156(1), and produces it to the head of the district tax office on request.
One boundary is worth noting. This form claims a reduced rate. Where a treaty exempts the income from Korean tax altogether, the instruction tells you not to use it.
The three-year clock
A filed application does not last indefinitely. The instruction requires a fresh one whenever your country of residence, address, Korean domicile or telephone number changes, and whenever three years have elapsed since the last filing. Nothing announces the lapse. A holder who filed once and treated it as permanent reverts to 22 per cent, and the only visible trace is the deduction on the dividend statement. Check that figure each time rather than assuming the paperwork is still alive.
The 10 per cent and 5 per cent rates belong to companies
Both conventions carry a lower tier, and neither tier is available to an individual.
The Korea–US convention limits Korean tax on dividends to 15 per cent, and to 10 per cent only where the recipient is a corporation satisfying stated conditions. The State Department’s 1976 letter of submittal describes the design in one line: the rate on portfolio dividends is limited to 15 per cent, while on dividends paid by a subsidiary to a parent corporation the rate may not exceed 10 per cent. The National Tax Service made the same point in a published Q&A, answering a question about the 10 per cent rate by noting that it applies where the recipient is a corporation meeting certain conditions, and that other cases fall under 15 per cent.
The Korea–UK convention follows the same design. Article 10(2) allows 5 per cent where the beneficial owner is a company, other than a partnership, controlling directly or indirectly at least 25 per cent of the voting power in the company paying the dividend, and 15 per cent in all other cases.
An individual therefore claims 15 per cent under either treaty. A retail holder who quotes 10 or 5 per cent to a broker is quoting a rate written for a corporate parent, and the claim will not survive the form.
Whether the local surtax rides on top of the treaty cap
Korea charges its local income tax at 10 per cent of the income tax withheld. That is the arithmetic behind both composite figures: 20 per cent becomes 22, and 14 per cent becomes 15.4.
Whether the same surcharge sits on top of a treaty-capped rate depends on whether the treaty counts the local tax among the taxes it covers, and the National Tax Service’s own filing instruction anticipates both outcomes. Instruction 8 tells the applicant that where the reduced rate under the treaty does not include the local income surtax, the rate entered on the form must reflect the rate under Article 89(1) of the Local Tax Act. Entered that way, a 15 per cent cap becomes 16.5.
Where the two conventions part company
The two conventions read differently on this point. Korea–UK Article 2(3)(a) lists the Korean taxes covered as the income tax, the corporation tax, the inhabitant tax and the special tax for rural development. Korea–US Article 1(1)(b) lists only the income tax and the corporation tax, and Article 1(3) extends the convention to taxes of every kind for two narrow purposes: the non-discrimination article, and, at national level, the exchange of information article.
We found no published National Tax Service ruling stating the figure applied to US resident individuals, so we do not assert one. What the documents establish is the mechanism and the difference in the texts. Ask your withholding agent which rate it enters on the form, and compare it with the deduction on your statement. If yours reads 16.5 per cent rather than 15, this is the reason. If you hold a ruling or a broker confirmation either way, we would like to see it.
Which rate lands on your Korean dividend
- Does Korea treat you as a tax resident?
- Yes Resident schedule, 15.4%
- No Did a current Form 29-12 reach the withholding agent before the payment date?
- No Statutory rate, 22%
- Yes Does your treaty count Korea’s local income tax among covered taxes?
- Yes Treaty cap as written
- No Treaty cap plus the local surtax
A form filed more than three years ago is not current. Neither is one filed before you changed address or country of residence.
If you hold through an ADR, an ETF or a fund
None of the above is yours to file. Korea deducts the tax before the money reaches a depositary bank or a fund, and the Korean withholding agent is not paying you. You cannot improve your own position by submitting a form, because you are not in the transaction the form describes.
Where Korean-source income passes through an overseas investment vehicle, that vehicle files Form 29-13, the Report of Overseas Investment Vehicle, under Article 156-6 of the Personal Income Tax Act and Article 98-6 of the Corporate Income Tax Act. The report lists beneficial owners by country of residence and states the rate to apply to each. Korea may instead treat the vehicle itself as the beneficial owner, provided it qualifies as an overseas public collective investment vehicle: it must resemble a collective investment vehicle under the Financial Investment Services and Capital Markets Act, hold registration or approval in a treaty partner country, avoid private placement, carry 100 or more investors, and escape any treaty provision denying treaty benefits.
Opacity in the chain costs the treaty rate
The instruction to Form 29-13 covers the case where nobody can identify a beneficial owner’s country of residence. The vehicle enters the ISO country code ZZ, and the domestic rate under Article 156(1) of the Personal Income Tax Act or Article 98(1) of the Corporate Income Tax Act applies, grossed up for the local surtax. The treaty is not denied on the merits. It simply has nobody to attach to.
This is also why the distribution you receive from a Korea equity fund is not the dividend the Korean company declared, and why the gap is not something you can reclaim downstream. Seoul settled it before the fund ever saw the cash. The same logic runs through the instruments we examined in what SSNLF actually is and the account structures in how foreign investors buy Korean stocks.
What to check on your next dividend
- The effective rate on the statement. 22, 16.5, 15 or 15.4 each says something specific about how the chain has classified you. Work backwards from the number rather than from what you assume your status to be.
- The date of your last Form 29-12. If you cannot name it, treat the claim as lapsed and ask your broker to confirm.
- Whether the position sits in your name. For a holding inside an omnibus or fund structure, that structure’s own filings determine the rate, not yours.
- Evidence of Korean tax paid. If you intend to claim a credit in your home jurisdiction, ask the withholding agent what documentation it can issue and in what language.
Sources
We cite the procedure to the statute and to the official form that implements it, and we name Korean-language sources in Korean.
- 소득세법 제156조 제1항 — 비거주자의 국내원천소득에 대한 원천징수. The withholding obligation and the statutory rate applied where no treaty claim is on file.
- 소득세법 제156조의6 제1항, 같은 법 시행령 제207조의8 제1항 — 조세조약상 제한세율 적용 신청 의무.
- 소득세법 시행규칙 별지 제29호의12 서식 「비거주자의 국내원천소득에 대한 조세조약상 제한세율 적용 신청서」(2013. 2. 23. 개정) 및 작성방법 — the beneficial owner declaration, the residency test items, the immigration records attachment, the five-year retention duty, the three-year re-filing rule, and instruction 8 on the local income surtax.
- 소득세법 시행규칙 별지 제29호의13 서식 「국외투자기구 신고서」 및 작성방법 — the conditions for an overseas public collective investment vehicle, the beneficial owner schedule by residence country, and the ZZ country code default.
- 지방세법 제89조 제1항 — 지방소득세율. Referred to directly by instruction 8 of Form 29-12.
- 법인세법 제98조 제1항 및 제98조의6 — 외국법인에 대한 원천징수 및 제한세율 적용 신청.
Treaty texts and composite rates
- Convention between the United States of America and the Republic of Korea for the Avoidance of Double Taxation, signed 4 June 1976, Articles 1 and 12, together with the Department of State letter of submittal of 14 August 1976, in the text published by the Internal Revenue Service.
- UK/Korea Double Taxation Convention, signed 25 October 1996, Articles 2 and 10, in the text published by the UK government, and the explanatory note to the Double Taxation Relief (Taxes on Income) (Republic of Korea) Order 1996.
- 국세청 영문 세무 Q&A (2014년 9월) — 한미조세조약의 10% 제한세율은 일정 요건을 갖춘 법인 수령자에게 적용되며 그 밖의 경우에는 15%가 적용된다는 취지의 답변.
- The composite 15.4 and 22 per cent figures — statutory rate plus local income tax — are as recorded in the published Korea tax summaries of PwC and KPMG, and follow arithmetically from a local surtax of 10 per cent of the income tax withheld.
Corrections
Tax procedure changes, and the authorities revise forms. If you believe anything above is inaccurate or out of date, write to [email protected] with the source. We will check it, correct the page where you are right, and note the change. We are particularly interested in documentation on the local surtax question above.
Disclosure. This article is general information about Korean withholding procedure. It is not tax advice, not investment advice, and not a recommendation to buy or sell any security or to use any broker or platform. Your rate depends on your country of residence, your treaty and your own circumstances, and only a qualified adviser in your jurisdiction can apply it to your position. This site has no commercial relationship with any broker, custodian or adviser. See the Editorial & Sourcing Policy and Disclaimer.