Capital gains tax in Korea is one of the more complex areas for foreign residents — the rules differ based on whether you’re selling Korean assets, foreign-held stocks, Korean real estate, or global ETFs. This guide explains what’s taxable, at what rate, and how to file.
1. Types of Capital Gains and Who Pays
Korea taxes capital gains under the income tax system. As a foreign resident (Korean tax resident), you’re liable for Korean capital gains tax on:
- Sale of Korean real estate
- Sale of shares in unlisted Korean companies
- Sale of foreign-listed stocks (including US stocks, ETFs) if you are a Korean tax resident
- Sale of shares in listed Korean companies — if you are a “major shareholder” (대주주) by threshold
Non-residents (short-term visitors) are generally only taxed on Korean-source gains.
2. Foreign Stocks and ETFs (Most Relevant for Expats)
For Korean tax residents who own foreign-listed stocks (US stocks, US ETFs, European shares), gains from sale are taxable as 금융투자소득 (financial investment income) under the revised system being phased in, or currently as part of the global income tax (종합소득세) for some categories.
Current Rules (2026)
Note: Korea’s financial investment income tax reform has been subject to repeated legislative delays. As of 2026:
- Foreign stocks: Gains from selling foreign-listed shares are taxed at a flat 22% rate (20% + 2% local surtax) on gains exceeding ₩2,500,000 annually
- Domestic listed shares (소액주주): Minor shareholders in listed Korean companies currently pay no capital gains tax on stock sales (this may change under pending reform)
- Unlisted Korean company shares: Taxed at 10–30% depending on holding period and amount
- Annual exemption: ₩2,500,000 in gains from foreign stocks is exempt per year — gains above this threshold are taxable
How It Works in Practice
If you sold US stocks and realized ₩10,000,000 in gains:
- Exempt amount: ₩2,500,000
- Taxable gain: ₩7,500,000
- Tax at 22%: ₩1,650,000
You report and pay this through the 종합소득세 신고 (global income tax return), filed by May 31 of the following year.
3. Korean Real Estate Capital Gains Tax
Real estate capital gains tax (양도소득세, yangdo-so-deukse) is one of the more complex areas of Korean tax law, with rates and exemptions that vary significantly based on circumstances.
Standard Rates for Individuals
| Situation | Tax Rate |
|---|---|
| Property held over 2 years, single home (1세대 1주택) | Potentially exempt (up to ₩1.2B in some cases) |
| Standard long-term holding (2+ years) | 6–45% progressive rate |
| Short-term holding (under 1 year) | 70% |
| Holding 1–2 years | 60% |
| Multiple homes in regulated areas (다주택자, 조정대상지역) | Progressive rate + 20–30% surcharge |
The 1세대 1주택 (One Household, One Home) Exemption
This is the most important exemption in Korean real estate tax:
- If you have lived in Korea as a registered resident, owned only one home, and held it for at least 2 years (3 years in regulated areas like most of Seoul), you may be exempt from capital gains tax up to ₩1.2 billion in gains
- For foreigners: this exemption is available if you are a Korean tax resident who owns the property in your name and meets the residency requirements
- The holding period and residency requirements have been tightened repeatedly — verify current rules with a licensed Korean tax accountant (세무사) before selling
4. Foreign Residents and the “Foreign Taxpayer” Rules
Korea distinguishes between residents and non-residents for capital gains purposes. Specific rules for foreign workers:
- As a Korean tax resident: You owe Korean capital gains tax on all capital gains, regardless of where the asset is located or what currency you receive
- As a non-resident: Only Korean-source gains (Korean real estate, Korean company shares) are taxable in Korea
- Home country tax treaties: Double taxation treaties may reduce or eliminate overlap — but you must file in Korea and claim credits in your home country
5. US Citizens: Additional Layer
US citizens face a unique situation: the US taxes based on citizenship, not residency. A US citizen living in Korea:
- Owes Korean capital gains tax as a Korean resident on worldwide gains
- Also owes US capital gains tax on worldwide gains (as a US citizen)
- The US-Korea tax treaty and Foreign Tax Credit (FTC) system generally prevents double taxation — Korean taxes paid can be credited against US liability
- However, the mechanics are complex and require both a Korean 세무사 and a US CPA familiar with foreign income to navigate correctly
6. How to File: 종합소득세 신고
For capital gains on foreign stocks held through a Korean brokerage:
- Korean brokerages calculate and withhold tax on gains from foreign stocks automatically in many cases — check your brokerage’s system
- For foreign accounts (US brokerage accounts), you must self-report: file a 종합소득세 신고 by May 31 through Hometax (홈택스)
For Korean real estate sales:
- Report must be filed within 2 months of the sale date using the 양도소득세 신고 form
- Preliminary return filed within 2 months; final with the May 종합소득세 if adjustments are needed
7. Overseas Financial Account Reporting
Korean residents with overseas financial accounts (brokerage accounts, bank accounts) exceeding ₩500,000,000 in aggregate at any point during the year must file a foreign account report (해외금융계좌 신고) by June 30 of the following year. Failure carries significant penalties.
Frequently Asked Questions
Q: I sold my US stocks through a US brokerage. Does Korea know?
A: Korea participates in the Common Reporting Standard (CRS) — Korean financial institutions and partner country institutions exchange account data automatically. Additionally, the NTS can request information under tax treaties. Non-reporting is a legal risk, not a viable strategy.
Q: I’m renting in Korea and have no Korean assets except for some Korean stocks. Do I owe capital gains tax when I sell?
A: If you’re a minor shareholder of listed Korean companies (소액주주), currently no capital gains tax applies. If you’re a major shareholder (threshold: owning 1%+ of a KOSPI company or shares worth ₩5B+), capital gains tax does apply. For unlisted Korean company shares, tax applies regardless.
Q: Can I use a Korean broker for US stocks to simplify tax reporting?
A: Yes — Korean brokerages (Kiwoom, Mirae Asset, KB Securities) offer access to US stocks and often handle the Korean tax calculation automatically. This simplifies compliance compared to maintaining a foreign brokerage account. The trade-off is less selection and sometimes higher trading costs.
Q: If I leave Korea mid-year after selling my apartment, do I still owe Korean capital gains tax?
A: Yes — the gain was realized in Korea and remains subject to Korean tax regardless of whether you subsequently leave. The 2-month filing deadline for real estate 양도소득세 applies from the sale date, not your departure.
Key Resources
- NTS Hometax (홈택스): hometax.go.kr — filing portal
- NTS International Taxation: nts.go.kr/english — English-language guidance on foreign income
- DART (dart.fss.or.kr): For research on Korean company shareholdings
- Source: Income Tax Act (소득세법) — real estate capital gains at Articles 94–114; financial investment income framework under reform