Imminent Announcement of 2026 H2 Tax Reform Plan: Analyzing Market Volatility and Impact

Background of Market Volatility Amid Imminent Tax Reform Announcement

With the government's announcement of the tax reform plan for the second half of the year imminent, the volatility of the domestic stock market is noticeably expanding. Following the final confirmation of the abolition of the financial investment income tax, market attention has shifted to subsequent tax measures and discussions on tax equity. As capital expecting benefits from specific policies flows in preemptively, the intraday fluctuation of related stocks is widening. This can be interpreted as a complex result of the movements of institutional and retail investors seeking to adjust their portfolios before uncertainty is resolved.

Overview of Key Investment Tax Systems Applicable in 2026

To understand the current capital flows in the market, it is necessary to clearly examine the investment tax system applied as of 2026.

• Adjustment of Securities Transaction Tax Rate: As a subsequent measure for securing tax revenue and tax equity following the abolition of the financial investment income tax, the previously reduced securities transaction tax rate has been restored, and a uniform rate of 0.20% is applied to both KOSPI and KOSDAQ markets upon selling.
• Separate Taxation on Dividend Income of High-Dividend Listed Companies: This system, which is temporarily implemented for three years starting in 2026, allows dividend income from listed companies that meet specific requirements, such as a dividend payout ratio of 40% or more, to choose separate taxation at 14-30% instead of comprehensive taxation.

Major Shareholder Capital Gains Tax Standard: The criterion for determining major shareholders subject to capital gains tax on stocks remains at 1 billion KRW in market capitalization per stock. Concentrated investments in specific stocks carry the probability of being included in the taxable target.

Capital Shift Patterns Centered on Policy Beneficiary Stocks

In a situation where the details of the new tax reform plan have not been finalized, the market is already reallocating capital centered on 'high-dividend stocks' and 'corporate governance improvement expectation stocks'. In particular, as the separate taxation system for dividend income of high-dividend companies goes through the actual application phase, a phenomenon is observed where long-term investment capital aimed at improving after-tax returns flows into traditional financial and telecommunication sectors.

Consequently, this announcement of the tax reform plan is a variable that determines the medium- to long-term investment landscape of the domestic capital market beyond a simple change in tax laws. Market participants should refrain from short-term trading based on rumors and closely evaluate the actual impact of tax changes on individual corporate fundamentals and dividend policies.