The Korean government temporarily lowered dividend tax rates for investors of firms that significantly increased dividend payments in 2015-2017. We examine how the dividend tax cut affects corporate payout policies. We found substantial dividend payment growth in the qualifying firms, mainly funded by operating cash flow; neither cash holding nor share repurchase is significantly reduced. The insider ownership is found to be an important factor in driving a continual enjoyment of the dividend tax cut. Yet, a large proportion of firms only temporarily enjoy the dividend tax cut in 2015, which argues against slow adjustments in dividend payout policy.