 |
Photo: Korea Exchange |
[Alpha Biz= Paul Lee] Starting this year, Korean investors who sell overseas stocks can receive capital gains tax relief if they reinvest the proceeds in domestic stocks. The measure is part of government efforts to reduce dollar buying demand and stimulate the domestic stock market.
Eligible securities include overseas stocks and foreign-listed ETFs purchased by December 23, 2025. Gains reinvested through a “Domestic Market Return Account” (RIA) in domestic stocks—excluding domestic-listed foreign ETFs—can be partially or fully exempt from capital gains tax. The likely maximum reinvestment amount eligible for the tax benefit is 50 million won.
For example, if an overseas stock bought for 17.5 million won rises to 50 million won, the 30 million won taxable gain would normally incur a 22% tax. Reinvesting through RIA for at least one year in the first quarter of 2026 could fully exempt the 6.6 million won tax. Later reinvestments within the year receive partial exemptions: 80% in Q2 and 50% in the second half.
Additionally, a “forward FX selling product” allows investors to hedge currency risk on overseas holdings without selling the stocks directly. Taxpayers can claim a 5% deduction (up to 5 million won) on such hedging products purchased before December 23, 2025.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
