automatic reinvestment of dividends TR ETF, only domestic stocks

From July, overseas stock types are expected to disappear among TR ETFs that automatically reinvest without paying income tax on dividends generated by listed stock funds and ETFs.

The Ministry of Strategy and Finance banned the tax law from operating current TR ETF products that automatically reinvest, including interest and dividends, as they violate the "principle that all collective investment instruments should be settled and distributed at least once a year" under the tax law.

However, the domestic stock type decided to allow the TR method to revitalize the market.

TR ETF is a product that reinvests in full without distributing interest, dividend income, and trading profits during the holding period.

You don't have to pay taxes right away because you don't distribute any revenue.

Taxation is based on the holding period at the time of redemption or transfer.

As a result, TR ETFs that follow overseas indexes such as Nasdaq in the U.S. can withhold income tax annually and reinvest only the remaining profits if interest and dividend income are generated during the holding period.