The structure is simple. Profits from selling are taxed at the capital gains rate (22%); dividends received are taxed at 15%, and for larger investors whose dividend and interest income exceeds ₩20M a year, comprehensive taxation kicks in on top. Let's break each one down.

There are four steps.

1. Sum the P&L of all positions you sold this year (Jan 1–Dec 31) — gains and losses combined across all foreign stocks.
2. Subtract the ₩2.5M basic exemption from the net gain.
3. Multiply the remainder by 22% (20% capital gains tax + 2% local income tax).
4. File and pay in May of the following year.

Key point: the tax applies only to what you actually sell. No matter how large your unrealized gains are, there's no capital gains tax until you sell. And selling losing positions in the same year lets you offset gains against losses — for example, if Stock A is +₩6M and Stock B is −₩3M, the net is +₩3M, and after the exemption only ₩0.5M is taxed at 22%, i.e., ₩110,000.

Enter your total buy/sell amounts into the calculator below for an instant tax estimate.

3. How the Exchange Rate Changes Your Tax — Settlement-Date Reference Rates

Capital gains are calculated in KRW, not in dollars. The exchange rate used here is not the rate at which you actually converted funds — it's the settlement-date KRW reference rate (Seoul Foreign Exchange Brokerage basic rate) on each buy and sell date. Brokers factor this into their capital gains statements automatically, but you need to understand the principle to make sound tax-saving decisions.

2026 makes this principle especially important. The KRW/USD rate started the year at around ₩1,470 and rose to roughly ₩1,540 by early July (intraday low about ₩1,476, high about ₩1,559 — based on data collected by this site). Even with the same dollar profit, the KRW gain — and therefore the tax — grows in line with FX appreciation.

The takeaway: even a USD breakeven can become a taxable KRW gain when the exchange rate rises, and conversely, a USD profit can shrink into a smaller taxable gain if the FX rate drops sharply. If you're curious how FX moves themselves affect returns, check out the FX-Hedged vs. Unhedged Guide with its built-in calculator.

Dividends (distributions) from US stocks and ETFs are deposited into your account after a 15% US withholding tax, per the Korea–US tax treaty. Because this rate is higher than Korea's domestic dividend withholding rate (14%), no additional Korean tax is generally levied on top. Done, with no separate filing — simple enough.

The complication arises when your total annual financial income (interest + dividends) exceeds ₩20M. The amount above the threshold is combined with your other income and taxed at the progressive comprehensive income tax rates (6.6–49.5% including local tax), and must be reported via the May comprehensive income tax filing the following year. Investors running large high-dividend portfolios need to keep this line in mind. For example, holding about ₩250M of JEPI, with its ~8% yield, gets you close to the ₩20M annual dividend line.

One more thing — once financial income passes a certain threshold (above ₩10M per year), it can factor into your national health insurance premium calculation, and may also affect the status of your dependents. The thresholds and how they apply differ by case, so check with the National Health Insurance Service for specifics.

* Dividend taxation has been an area of ongoing reform discussions. This article is current as of July 2026; please confirm the latest rules with the National Tax Service or your broker before filing.

① Use the ₩2.5M Exemption Every Year (Spread Sales Across Years)

The basic exemption resets every year. If you sell a position with ₩5M in unrealized gains all in one year, you'll owe ₩550,000 in tax; but split the sale — ₩2.5M this year and ₩2.5M next year — and the tax is zero. Building the habit of checking "how much of my exemption is still available" at year-end is a useful one.

② Offset Gains by Selling Losers (Loss-Gain Netting)

In a year with large realized gains, selling losing positions in the same year reduces your taxable base. Buying back the same security after selling is permitted (Korean tax law has no US-style wash-sale rule), but you need to weigh the risk of price moves after the repurchase and the transaction costs. Importantly, losses cannot be carried across years, so netting must happen within the same calendar year.

③ Gifts to Family — But Mind the 1-Year Holding Rule

You can gift up to ₩600M to a spouse over 10 years free of gift tax, and the recipient's acquisition cost steps up to the market value at the time of the gift. However, under a rule that applies to gifts made from 2025 onward, if the recipient sells the gifted stock within one year, the calculation reverts to the original acquisition cost (a carryover rule), so the "gift and immediately sell" tax-saving workaround no longer works. If you're considering a gift, be sure to consult a tax advisor on the holding-period requirements and detailed application.

④ Invest Through Tax-Advantaged Accounts from the Start

You can't buy US stocks directly inside an ISA, pension savings, or IRP, but you can gain exposure to the same indices through domestically listed US ETFs while enjoying tax-exempt or tax-deferred benefits. The higher the dividend/distribution component of your strategy, the greater the benefit of a tax-advantaged account. For a side-by-side of the pros and cons of each account, see the ISA, Pension Savings, and IRP Guide with its calculator.

• Filing window: May 1–31 of the year following your sales (sales in 2026 → file by May 2027).
• Option 1 — Free broker filing service: Most brokers accept applications in March–April and file on your behalf at no charge. If you use multiple brokers, remember to consolidate all statements and file with a single one.
• Option 2 — File directly on HomeTax: Download your broker's capital gains statement and enter it on HomeTax. P&L and FX calculations are auto-populated, so it's easier than you might expect.
• What if you don't file? A 20% non-filing surcharge applies, plus a late-payment surcharge of 0.022% per day. Note that even when your gains are within the ₩2.5M exemption and your tax is zero, a filing is still required in principle.