People Power Party lawmaker Choi Hyung-du has jointly proposed a bill with fellow bipartisan members to introduce a special income tax payment provision for Restricted Stock Units (RSU) to help secure key talent in national strategic technology sectors.
Rep. Choi, along with Reform Party leader Lee Jun-seok and Democratic Party Rep. Hwang Jung-ah, co-sponsored an amendment to the Restriction of Special Taxation Act that allows for the installment payment of income tax on earnings generated from RSUs over a period of up to five years.
RSUs refer to stocks granted by a company to employees who have achieved specific performance goals, with restrictions placed on the timing of the transfer.
The amendment allows taxpayers to pay 20 percent of the calculated tax amount when filing their comprehensive income tax return, with the remaining 80 percent to be paid in equal installments over the following four years.
While various tax incentives exist for venture company stock options—such as a 200 million won annual tax exemption on exercise gains, five-year installment payments, and special capital gains tax treatment—there is currently no separate tax support system for RSUs. The bill was proposed on the basis that this lack of support makes it difficult for national strategic technology companies to operate global-standard performance compensation systems.
Rep. Choi stated, "This will alleviate the burden of having to pay taxes before actual cash inflows occur and will support the establishment of long-term, performance-oriented compensation systems."
He added, "The competitiveness of national strategic technologies such as AI, semiconductors, and bio ultimately comes from people. By supplementing the RSU tax support that was not included in the government's tax reform proposal through legislation, the National Assembly will enhance the talent competitiveness of South Korea's high-tech industries and support companies in actively utilizing long-term, performance-based compensation systems."
(Photo: Yonhap News)