Foreign Tax Credit Application Process Changed for Overseas ETF and Fund Investors
Starting this year, investors in overseas funds and overseas-listed ETFs, including REITs, set up in Korea must apply directly for foreign tax credits. Previously, the foreign tax paid was credited at the fund level, but from 2024, individuals whose financial income exceeds KRW 20 million must claim the credit themselves when filing their comprehensive income tax returns. To do so, investors must prepare and submit the necessary calculation statement based on documents provided by financial institutions, with the application deadline set for May.
This new policy reflects the Korean National Tax Service's efforts to reduce the tax burden on investors in overseas assets by introducing the 'Fund Foreign Tax Credit' system for the first time. The change also applies to investors in domestically listed overseas ETFs and REITs, enabling them to claim back foreign taxes already paid and increasing interest in potential tax refunds. Given these changes, investors are advised to thoroughly understand the process, organize the required documentation, and ensure timely application to benefit from the new system.
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