How is the capital gains tax on US stocks calculated for South Korean residents?
Learn about annual profit/loss aggregation, the 2,500,000 KRW deduction, the 22% tax rate, KRW conversion, and filing in May of the following year.
Table of contents
Remember this first
First, 3 things to remember
- 1Capital gains and losses are calculated in KRW, and gains and losses from taxable stocks within the same year are aggregated.
- 2The basic deduction is 2,500,000 KRW per person annually, not per account.
- 3Verify the brokerage data and whether the filing and payment are complete yourself.
Who does this explanation apply to?
This is an educational guide regarding the sale of general overseas-listed stocks and overseas-listed ETFs for residents under Korean tax law, based on checks as of 2026, 10, 20. For overseas stock taxation, you must verify requirements such as having maintained a domestic address or residence for 5 years or more until the date of transfer. Recent returnees, immigrants, US taxpayers, corporations, and special products require separate review.
Realized profit or loss from selling is different from unrealized valuation profit or loss. Even for US stock ETFs, ETFs listed on the Korean exchange do not have the same tax structure as general overseas-listed ETFs. Special equity related to warrants, partnerships, and real estate does not necessarily follow the same rules just based on the product name.
General calculation sequence
Subtract the acquisition cost and recognized necessary expenses from the transfer value, and aggregate the offsettable stock profits and losses for the same taxable year. In the example applied to general US-listed stocks, calculate the national tax of 20% and local income tax of 2%, totaling 22%, after the basic deduction. If special assets or different tax rates are involved, it does not end with a simple formula.
| Hypothetical annual statement | Amount |
|---|---|
| A brokerage realized profit | 8,000,000 KRW |
| B Securities realized loss | -3,000,000 KRW |
| Total capital gains amount | 5,000,000 KRW |
| Tax base after annual basic deduction | 500 - 250 = 2,500,000 KRW |
| Total national and local income tax | 2,500,000 KRW × 22% = 550,000 KRW |
The 2,500,000 KRW amount is not provided separately by each brokerage.
You must combine the offsettable profits and losses from multiple accounts, multiple brokerage firms, and multiple countries. Even if they can be offset against taxable domestic stock profits and losses, the basic deduction is 2,500,000 KRW in total. You must not arbitrarily offset losses from tax-exempt domestic listed stocks of general minority shareholders against overseas stock profits.
Capital losses are not offset against dividend or earned income. It is also not assumed that general stock capital losses are automatically carried forward to the next year to be deducted. Having a tax liability of 0 due to the basic deduction is a different concept from the income itself being tax-exempt; check your own records to see if filing is necessary.
Returns in USD versus taxable returns in KRW
Convert to KRW using the base exchange rate or cross rate applicable at the time of settlement for each acquisition, transfer, and expense. This may differ from a method that multiplies the total dollar profit/loss by the exchange rate currently on screen or a single preferential rate used by an individual for actual currency exchange.
Hypothetically, if the purchase price is 1,000 dollars at an applied exchange rate of 1,200 KRW, and the sale price is 1,000 dollars at 1,400 KRW, the KRW profit excluding costs is 200,000 KRW. Even if the dollar stock price remains the same, a KRW taxable profit or loss may occur. You need to check your sale profit or loss even if you continue to hold the dollars after selling or do not withdraw them in KRW.
Trading data for tax purposes rather than app-based return rates
Check the criteria for calculating acquisition cost when the same stock is purchased multiple times. The National Tax Service explains the First-In-First-Out (FIFO) method when the acquisition date is unclear and also provides guidance on the consistent moving average calculation used by brokerage firms under certain conditions. Do not arbitrarily change the criteria to select only favorable results.
If you have transfers from other firms, stock splits, mergers, gifts, or fractional share trading, verify that the cost basis and quantity are correctly linked. For year-end sales, do not look only at the order date; check the attribution year based on the settlement date and market holidays, and review guidance from your brokerage.
Check the filing and payment in May of the following year.
For foreign stocks, instead of a preliminary return, you generally file a final tax return and pay taxes between May 1 and 31 in the year following the sale. If the deadline falls on a public holiday, check the extension rules and the National Tax Service schedule for that year. Ensure you review both the national tax and local income tax filings and payments.
You can file directly via Hometax or use a brokerage's filing service, but availability, deadlines, and the scope of data from other firms vary by brokerage. Applying for a filing service does not mean payment is complete. Keep your tax return, receipt, payment confirmation, and cost basis records, and check for any omitted or corrected transactions.
You should not make such assumptions
“If you use two brokerage firms, the basic deduction is also 5,000,000 KRW.”
This is the annual aggregate basic deduction per individual. A new deduction is not created for each account or brokerage firm.
Check what you have read.
- Have you verified your residency and product tax requirements?
- Have you aggregated the realized KRW gains and losses from all brokerage firms?
- Have you verified the transfer, corporate action, and settlement dates?
- Have you completed the filing and payment of national and local taxes?
Apply what you read to the actual screen
Try it on WAPE
Source and scope of verification
Reviewed · Version 1
- Foreign stocks and taxes (2025)New window
National Tax Service · Verify 2026-10-20
KRW conversion, acquisition cost, aggregation of financial income, foreign-sourced income not subject to domestic withholding, and foreign tax credits - Capital gains tax on stocks, etc.New window
National Tax Service · Verify 2026-10-20
Residency requirements for foreign stocks, scope of taxation, loss-profit netting, and deductions - Guidance on capital gains tax filing and paymentNew window
National Tax Service · Verify 2026-10-20
Final tax return for foreign stocks; filing and payment in May of the following year - Guide to capital gains tax on foreign stocksNew window
Daol Investment Securities · Verify 2026-10-20
General foreign stock 2,500,000 KRW deduction, 22% including local income tax, and filing procedures - Tax calendarNew window
National Tax Service · Verify 2026-10-20
Verification of annual filing and payment deadlines
This is educational material for observation and information comprehension. Hypothetical examples do not represent actual stocks or performance and do not provide buy or sell recommendations.