Income Tax Act Article 14-1

Beginning January 1, 2007, Income received by an individual from interest on government bonds, corporate bonds, and financial bonds shall not be added to the gross consolidated income, but withheld in accordance with the provisions of Article 88.Beginning January 1, 2010, the following income received by an individual shall not be added to the gross consolidated income, but withheld in accordance with the provisions of Article 88 at the rate of 10%:1. The portion of the pecuniary amount realized by short-term commercial papers at their maturity in excess of the selling price at their initial issuance is deemed as income from interest.2. The interest distributed from beneficiary securities or asset-backed securities issued in accordance with the Financial Asset Securitization Act and the Real Estate Securitization Act.3. The interest derived from repo (RP/RS) trade whereby an individual purchases securities or short-term commercial papers as described in the preceding paragraph and Subparagraphs 2 and 3 in this paragraph shall be the net amount of the sale price at their maturity in excess of the original purchase price.4. Income from transactions in structured products between individuals and securities firms or banks.The provision regarding special deduction for savings and investment as provided for in Item 3-3, Subparagraph 2, Paragraph 1 of Article 17 shall not apply to the interest as provided in the first paragraph and Subparagraphs 1 to 3 in the preceding paragraph.