Domestic stocks are almost untaxed, overseas stocks pay 22% — after a ₩2.5M deduction
Listed domestic shares carry no capital gains tax unless you are a major shareholder; only securities transaction tax applies on sale. KOSPI is 0.2% including rural special tax and KOSDAQ 0.2%, so selling ₩50M of shares costs ₩100,000 even at a loss. Overseas shares are taxed at 22% on gains after a ₩2.5M deduction: ₩10M of gains means ₩1.65M, and up to ₩2.5M is ₩0.
Conditions used in the video
- Listed domestic shares
- not a major shareholder → no capital gains tax · transaction tax only
- KOSPI
- transaction tax 0.05% + rural special tax 0.15% = 0.2%
- KOSDAQ
- transaction tax 0.2%
- Overseas shares
- (gains − ₩2.5M) × 22% (20% + 2% local)
- Overseas filing
- the following May · gains and losses netted
- Dividends
- 15.4% withheld (14% + 1.4%)
Results
- Domestic · ₩50M sold (₩20M gain)
- transaction tax ₩100,000
- Overseas · ₩10M gain
- ₩1.65M (22%)
- Overseas · ₩2.5M gain
- ₩0
- Domestic transaction tax
- 0.2% of the sale even at a loss
- Dividends
- 15.4% domestic and overseas
- Overseas filing
- by you, in the May tax season the following year
At a glance
Domestic is 0.2% of the sale; overseas is 22% of gains after ₩2.5M.
- Domestic · ₩50M sold (₩20M gain)₩100,000
- Overseas · ₩10M gain₩1.65M
- Overseas · ₩2.5M gain₩0
Why it works this way
Make ₩20M on domestic stocks and what is the tax? ₩100,000. Make ₩10M on overseas stocks and it is ₩1.65M. Same asset class, but the border sets the rate.
Securities Transaction Tax Act Article 8 · Enforcement Decree Article 5.
- Not a major shareholderno capital gains tax
- ₩50M KOSPI sale0.05% + 0.15% rural special = ₩100,000
- KOSDAQ0.2% transaction tax only
It attaches to the sale amount, so it is paid even at a loss.
Overseas shares are taxed at 22% on gains after a ₩2.5M deduction. ₩10M of gains means ₩1.65M, and up to ₩2.5M is ₩0. Losses and gains are netted across holdings, and you must file yourself the following May.
Income Tax Act Article 94 · Article 104(1)11 · Article 103.
- ₩10M gain− ₩2.5M = ₩7.5M
- × 22%₩1.65M
- Gain ₩2.5M or less₩0
Dividends, domestic or overseas, are withheld at 15.4%.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
Securities Transaction Tax Act Article 8 · Enforcement Decree Article 5 (Rates)
In force Current (checked 2026-09-05)
KOSPI 0.05% (rural special tax 0.15% separately), KOSDAQ 0.2%. Imposed on the sale amount.
What this means
Tax on domestic shares attaches to the sale, not the profit. Even at a loss it is 0.2%.
Income Tax Act Article 94(1)3 · Article 104(1)11 · Article 103 (Overseas share gains)
In force Current (checked 2026-09-05)
Gains on foreign shares are taxed at 20% (22% with local income tax) after an annual ₩2.5M deduction. Final return the following May.
What this means
₩2.5M is the threshold for overseas shares and 22% above it. The broker does not withhold, so file in May yourself.
Income Tax Act Article 129 (Withholding on dividends)
In force Current (checked 2026-09-05)
Withholding rate on dividend income 14%, local income tax 1.4%.
What this means
Dividends are 15.4% regardless of border. Above ₩20M they move into comprehensive taxation.
Run it on your own numbers
The calculator opens with these conditions already filled in. Change the figures and your own case comes straight out.
Open the Stock Trading Tax Calculator
Frequently asked
Is there really no capital gains tax on domestic stocks?
Not on listed shares unless you are a major shareholder. The major-shareholder threshold is set by the Income Tax Act Enforcement Decree, and over-the-counter or unlisted shares differ.
Do I pay transaction tax even at a loss?
Yes. Securities transaction tax attaches to the sale amount. Selling ₩50M of KOSPI shares at a loss still costs ₩100,000.
What about overseas losses?
Losses and gains in the same year are netted. The ₩2.5M deduction and 22% apply to the net gain.
Does the broker withhold overseas capital gains tax?
No. You must file the capital gains tax return yourself in the May tax season the following year. Only dividends are withheld, at 15.4%.
Results are estimates based on the inputs and on the rules as at the stated date. They may differ from a lender's actual assessment, and the rules change often. Take professional advice before any decision that matters.