South Korea to scrap tax evasion reward caps under 2026 reform plan

The 2026 tax reform package removes whistleblower payout caps, tightens inheritance and gift tax rules for suspected share price suppression, and adds capital-market incentives including ISA and BDC measures.

Summary

South Korea's 2026 tax reform proposal would abolish payout caps for reports of tax evasion and hidden assets, raise reward rates for smaller recoveries, lower reporting thresholds, and expand rewards for overseas trust reporting and consumer-facing violations such as credit card payment refusals. The same package also targets so-called share price suppression by requiring higher inheritance and gift tax valuations for flagged listed companies, while adding related measures including tax relief tied to SK's treasury-share cancellation, a new Productive Finance ISA, and incentives for business development companies that finance venture and small businesses.

Terms & Concepts
  • Share price suppression: A practice the government says involves controlling shareholders keeping a listed company's stock price artificially low to reduce inheritance or gift tax burdens during succession.
  • ISA: An Individual Savings Account, a tax-advantaged investment account; the proposal adds a Productive Finance ISA for domestic stocks and funds.
  • BDC: A business development company, described in the proposal as a listed public offering fund that supports venture and small businesses.