How capital gains tax works in South Korea
South Korea taxes capital gains through transfer income tax and separate schedules rather than one universal personal capital-gains rate. The relevant asset, holding period, residence status, transaction venue and use of the asset determine the calculation.
A small shareholder's sale of listed Korean shares through the securities market is generally outside personal transfer-income tax. A listed-company major shareholder, a small shareholder selling listed shares outside the market, and a holder selling private-company shares can be taxable.
For commonly taxed major-shareholder share gains, the national rate is generally 20% up to KRW 300 million of tax base and 25% above that amount. Shares in qualifying SMEs can use different rates, and shares held for less than one year by a major shareholder can face a 30% rate in the relevant cases. Local income tax is additional.
Private-company shares are generally taxable even for small shareholders. InvestKOREA summarizes common national rates as 10% for qualifying SME shares and 20% for other shares, subject to the asset definition, taxpayer status and statutory exceptions.
Land, buildings and rights in real estate use a separate transfer-income calculation. The ordinary long-term base is progressive, while unregistered assets, short holding periods, homes, multiple-home ownership, non-business land and designated areas can trigger special rates or surcharges.
South Korea also imposes securities transaction tax on the transfer value of shares. Current InvestKOREA guidance lists 0.05% for KOSPI, 0.20% for KOSDAQ, 0.10% for KONEX and 0.35% for unlisted shares, subject to statutory and market-specific changes.
The financial investment income tax proposal was abolished and the existing capital-gains framework retained. Virtual-asset gains are scheduled to be treated as separate other income from January 1, 2027, with a KRW 2.5 million annual basic deduction and a 20% national rate under the current law.
Tax rates at a glance
- Major-shareholder shares up to KRW 300m
- 20% nationalCommon rule
- Major-shareholder shares above KRW 300m
- 25% national
- Certain major-shareholder shares held under one year
- 30% national
- Other private-company shares
- 20% national
- Qualifying SME shares
- 10% national
- Unregistered assets
- 70% national
- Securities transaction tax
- 0.05% - 0.35%
- Virtual-asset gains from 2027
- 20% national
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
InvestorsProperty ownersFoundersPrivate-company shareholdersCrypto holders
Watch out for
- A 20% or 25% share rate is not a general South Korean capital-gains rate. Listed small shareholders, major shareholders, private shares, foreign shares, derivatives and real estate are classified differently.
- Major-shareholder status can use ownership and market-value tests, and a controlling shareholder group can require related holdings to be considered together. For 2026 domestic listed shares, the common thresholds are 1% for KOSPI, 2% for KOSDAQ, 4% for KONEX or KRW 5 billion market value.
- Real-estate rates change with holding period and housing facts. A short holding period, unregistered title, multiple homes, a designated adjustment area or non-business land can override the ordinary progressive table.
- Foreign securities can be taxable to a Korean resident even when the broker is abroad. Keep purchase records, FX conversions, foreign tax statements and evidence of any treaty or foreign-tax-credit position.
- The 2027 virtual-asset rule is not the same as a current 2026 exemption for every crypto-related receipt. Mining, staking, employment, business activity, lending and airdrops can fall under other income classifications before the dedicated regime begins.
Frequently asked questions
Are stock-market gains taxed in South Korea?
An ordinary small shareholder's sale of listed Korean shares through the securities market is generally exempt from personal transfer-income tax. Major-shareholder sales, off-market listed-share sales, private shares and foreign securities can be taxable.
What is South Korea's capital-gains rate on shares?
Common national rates for taxable major-shareholder gains are 20% up to KRW 300 million and 25% above KRW 300 million, with a possible 30% short-holding rate in certain cases. Private shares and SME shares can use different rates, and local income tax is additional.
Does South Korea tax crypto gains?
The dedicated individual virtual-asset regime is scheduled for January 1, 2027. Under the current law it uses a 20% national rate on annual net other income above a KRW 2.5 million basic deduction, with local tax additional.