Korean residents: if I sell overseas shares today, how much will I keep after tax?

Which sales does this estimate cover?

This guide is for an individual who is a Korean tax resident and sells shares listed on an overseas exchange, such as a US stock or ETF, through an ordinary taxable brokerage account. Korean capital gains tax on overseas shares applies to a resident who has kept an address or residence in Korea for at least five years in a row up to the transfer date. If you moved to Korea or returned more recently, check your status before using the figures below. Non-residents, corporations, unlisted shares, and derivatives follow different rules, and accounts such as an ISA or a pension savings account have their own tax treatment.

Korean listed shares are a separate case. A small shareholder selling them on the exchange generally owes no capital gains tax, although securities transaction tax is withheld on each sale, while major shareholders are taxed at different rates. Most of the work in an overseas share estimate is therefore about the overseas trades.

How do I calculate the gain in won?

The gain is the transfer price minus the acquisition cost and necessary expenses such as broker commissions. Tax applies to that gain, not to the full sale value, and every figure is measured in Korean won.

Proceeds are converted at the basic exchange rate on the day the sale money is received in your account, and the acquisition cost and expenses at the rate on the day the money was paid out. Those dates follow settlement, not the trade date, so use the rates on your broker’s capital gains report rather than the rate on the day you placed the order. A share that is flat in dollars can still show a taxable won gain if the won weakened while you held it, and the reverse can also happen. Converting both sides at today’s rate is not a reliable shortcut.

Which purchase lots does a partial sale use?

When the same share was bought on several dates at different prices, the cost assigned to a partial sale depends on the method used. Korean brokers’ capital gains reports commonly use first in, first out or a moving average, and the two can give different gains for the same sale.

Use the method on the report you will file from, and apply it the same way across brokers. Record the date, quantity, price, fee, currency, and account of each purchase so the cost of the shares sold can be traced back if your estimate and the broker’s report differ.

When does a sale count for the tax year?

For listed shares, the transfer date is generally the settlement date rather than the trade date. US shares settle one business day after the trade, and the time difference adds to the gap, so a sale placed in the last days of December can settle in January and fall into the next tax year.

Brokers usually publish a year-end cutoff for overseas trades. Check it before relying on a December sale to realize a gain or loss in the current year.

How do losses and the ₩2.5 million basic deduction reduce the gain?

Net every overseas share gain and loss realized in the calendar year, across all brokers and accounts. Since 2020, gains and losses on taxable Korean shares can also be netted with overseas shares. The ₩2.5 million basic deduction then applies once per year to that combined amount, not once per broker or per stock.

A net loss for the year cannot be carried forward. A loss realized in January does nothing for a gain realized the previous December, which is why the year’s other results are a required input for any single-sale estimate.

What rate applies to the taxable base?

The taxable base is the net annual gain minus the remaining basic deduction. Overseas shares are generally taxed at 20% national income tax, and local income tax adds 10% of that amount, or 2% of the base, for a combined 22%. Some shares, such as those of Korean small and medium-sized companies, can carry a different rate.

This capital gains tax is calculated separately from salary and other income, so the rate does not depend on your income bracket. An estimate can show the 20% and 2% parts separately so the assumption behind the total is visible.

Worked example: what is the tax on ₩15 million of proceeds?

Assume won-converted proceeds of ₩15,000,000, a won-converted acquisition cost of ₩9,000,000, and ₩50,000 of selling fees. The gain is ₩5,950,000. If the only other result this year is a ₩450,000 loss on another overseas share, the net gain is ₩5,500,000, and after the ₩2,500,000 basic deduction the taxable base is ₩3,000,000.

The tax is ₩600,000 of income tax plus ₩60,000 of local income tax, ₩660,000 in total. Cash from the sale after fees and that tax is ₩14,290,000. If the deduction had already been used by an earlier gain this year, the tax on this sale would be 22% of the full ₩5,500,000, or ₩1,210,000.

When and how is the tax reported?

Overseas share gains are reported in a final return for the year, filed and paid from 1 May to 31 May of the following year, usually through Hometax. Many Korean brokers offer to prepare or file the return for customers who traded overseas shares with them.

Keep trade confirmations, the broker’s capital gains report, fee records, and the exchange rates used. If you used several brokers, add their results into one annual summary so the basic deduction is not counted twice and no loss is left out.

What should a Korean pre-sale estimate ask and show?

Inputs should include tax residence and whether you have lived in Korea for five years in a row up to the sale, account type, market, shares sold, expected proceeds and fees, purchase dates, prices, and fees, the exchange rate on each day money was paid or received, the expected settlement date, other gains and losses realized this year, and how much of the basic deduction is already used. Results should show won proceeds, won cost, gain, net annual gain, remaining deduction, taxable base, income tax, local income tax, and after-tax sale cash.

Official references: National Tax Service guidance on capital gains tax returns and overseas shares (nts.go.kr) and the Hometax filing help pages (hometax.go.kr). This is an educational estimate, not tax advice or a completed tax return.

Portle’s Korean tax view is simpler than that list. It takes the gains already realized this year plus the gains on current taxable holdings in won, using average cost, subtracts the ₩2.5 million deduction, and applies 22%. It leaves out fees, gains held elsewhere, and tax already paid, converts at Yahoo closing rates rather than the rates used for filing, and counts gains on Korean listed shares the same way as overseas shares, so the figure is rough.