High-dividend companies will be required to disclose a corporate value enhancement plan, including dividend income and the dividend payout ratio for the immediately preceding fiscal year, by the day after a regular shareholders' meeting resolves profit dividends.

The Financial Services Commission said on Monday that a revised enforcement decree to the Restriction of Special Taxation Act containing the measures was approved at a cabinet meeting.

In December last year, the act was revised to introduce separate taxation of stock dividend income. The revised enforcement decree approved on Monday sets out in detail how high-dividend companies eligible for dividend-income tax benefits must make disclosures.

High-dividend companies must prepare and file a corporate value enhancement plan disclosure in the Korea Exchange's listed-company disclosure submission system by the day after the date on which a regular shareholders' meeting resolves profit dividends after the close of each fiscal year.

The value enhancement plan must include dividend income, the dividend payout ratio and the amount of profit dividends generated in the immediately preceding fiscal year. Companies may choose the content and length to be included in the disclosure beyond dividend-related performance.

This year, as the first year of disclosure, simplified disclosures will also be allowed, with only key items such as confirmation that the tax-benefit requirements for dividend income are met and targets for return on equity (ROE) and the dividend payout ratio stated in the main text.

The Korea Exchange plans to support disclosure work by high-dividend companies by offering one-on-one disclosure consulting next month and two online briefings on April 4 and 9.

It also decided to reflect disclosure forms, drafting precautions and examples of simplified disclosures in a guideline commentary.

[Yonhap]