Korea tax guide
Korean Stock Capital Gains Tax for Foreigners
Income Tax
Who this guide is for
- Foreign residents trading Korean shares
- Non-resident investors selling Korean stock
- Founders and employees selling private-company shares
- Investors with large shareholdings
Quick Answer
Whether a foreigner owes Korean capital gains tax on a share sale depends on tax residence, the issuer and market, shareholding status, transaction type, Korean domestic law, and any treaty. Dividend tax and securities transaction tax are separate from capital gains tax.
Key points
- Listed and unlisted shares can differ.
- Resident and non-resident rules are not the same.
- Major-shareholder and ownership tests may matter.
- Treaties can modify Korean taxing rights.
- Securities transaction tax is a separate review.
Detailed explanation
Classify the investor and security
Determine Korean tax residence, treaty residence, issuer country, listing status, market, ownership percentage, holding history, and whether the company is property rich.
Rebuild the gain
Retain trade confirmations, KRW conversions, acquisition cost, fees, splits, mergers, rights issues, and inherited or gifted basis. Broker profit figures may not equal the Korean tax computation.
Separate the taxes
Review capital gains tax, securities transaction tax, dividend withholding, and foreign-country reporting independently. One tax appearing on the brokerage statement does not settle the others.
Check before the sale
Large, private, cross-border, or pre-IPO transactions should be reviewed before signing because ownership and treaty evidence can be difficult to reconstruct after closing.
Documents you may need
- Broker transaction history
- Acquisition cost evidence
- Fees and corporate action records
- Ownership percentage history
- Certificate of tax residence
- Withholding and securities tax records
Common mistakes
- Assuming all exchange trades are tax-free
- Ignoring private or unlisted shares
- Losing acquisition-cost evidence
- Confusing dividend withholding with capital gains tax
- Applying a treaty without residence documents
When should you ask a tax professional?
Ask a qualified tax professional if you have income from several countries, business income, unclear tax residency, treaty questions, missing documents, late filing concerns, or a visa situation that depends on tax records. This site explains general patterns only and cannot review your personal facts.
FAQ
Are gains on Korean listed shares always tax-free?
No. Residence, ownership, investor status, and current share-tax rules must be checked.
Does a tax treaty exempt every foreign investor?
No. Treaty wording, residence, beneficial ownership, property-rich-company rules, and documentation can affect the result.
Is securities transaction tax the same as capital gains tax?
No. They are separate taxes with different tax bases and compliance mechanics.
Official Sources to Verify
Check the tax year, eligibility conditions, and publication date in the official material before applying a rule. A link marked “Service portal” helps you find a service; it does not substantiate a particular rate or entitlement.