South Korean Securities Firms Face 7-Fold Jump in Education Tax as ETF Trading Surges

From this year, South Korean securities firms are facing a sharp surge in education tax burden as exchange-traded fund (ETF) trading volume increases. The burden intensifies as a 1% tax rate applies to income exceeding 1 trillion Korean won, and trading profits from ETF liquidity provider operations are now included in the taxable base. Industry analysts warn that securities firms may expand bid-ask spreads to offset rising tax costs, potentially increasing transaction expenses for ETF investors.
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