Korean Capital Gains Tax on Foreign Stocks: A Complete 2026 Guide (해외 주식 양도소득세 완벽 가이드)

If you're a Korean resident buying Apple, NVIDIA, or VOO through Kiwoom, Toss Securities, or Interactive Brokers, you already know the US side of the story: file a W-8BEN, cut your dividend withholding from 30% to 15%. But most Korean investors I talk to completely miss the other tax bill — the one Korea itself sends you when you sell those shares for a profit.

This is 해외양도소득세 (overseas capital gains tax), and it's the most overlooked line item in a Korean retail investor's portfolio. Get it wrong and you either leave free money on the table (the annual deduction) or risk a 국세청 (National Tax Service) reconciliation notice years later with penalties tacked on.

Here is the complete 2026 picture: which gains are taxed, the ₩2.5 million annual deduction, how your brokerage reports you, how the Korea-US Tax Treaty prevents double taxation on capital gains, and the ISA account strategy that can shield up to ₩2 million of additional gains per year.

The One-Sentence Rule Most Koreans Get Wrong

As a Korean resident, your US stock capital gains are taxed in Korea — not in the United States.

The US does not withhold tax on capital gains realized by non-resident aliens selling US-listed securities. Article 13 of the Korea-US Tax Treaty assigns capital gains taxation rights to the country of residence (Korea, for you), not the country of source (the US). Dividends are split (15% US, residual Korean side); capital gains are entirely Korea's to tax.

💡 한국어 요약: 미국 거주자가 아니면 미국은 양도차익에 세금을 떼지 않습니다. 한국 국적/거주자가 미국 주식을 팔아 시세차익이 나면, 미국이 아닌 한국에서 양도소득세가 부과됩니다.

So when you sell 100 shares of AAPL for a $3,000 profit, IBKR does not send $660 (22%) to the IRS or the NTS. You must report that gain on your year-end tax settlement (연말정산) or global income return (종합소득세 신고). Whether anyone is checking depends on which brokerage you use — which is the next critical detail.

The ₩2.5 Million Annual Deduction

Under 소득세법 제154조 (Income Tax Act Article 154), Korean residents who realize capital gains on overseas securities are entitled to a ₩2.5 million basic deduction per year. The mechanics:

• Total overseas capital gains for the calendar year are summed across all foreign securities accounts (US brokerages, Korean brokerages, overseas mutual funds).
• If the total is ₩2.5 million or less, no capital gains tax is owed.
• If the total exceeds ₩2.5 million, 22% (20% national + 2% local education surtax) is applied only to the amount above ₩2.5 million, not the full gain.

At ₩1,350/USD (June 2026 reference rate), ₩2.5 million ≈ $1,850. So a Korean investor can harvest roughly $1,850 in foreign stock profits each year, tax-free.

Worked Example

You sell AAPL for a $4,000 gain and VOO for a $1,000 gain in 2026.

Without applying the deduction, you'd owe ₩1,485,000. The deduction saves you ₩550,000 (~$408) — every single year, just by knowing it exists.

Tax-Loss Harvesting Within the ₩2.5M Bracket

Because the deduction is per calendar year on net overseas capital gains, you can do a form of loss harvesting. If you're up $2,000 on AAPL and down $800 on TSLA in December, selling both lets you net the gains at $1,200 — well under the ₩2.5M (≈$1,850) ceiling. You lock in the loss, stay under the deduction, and owe zero Korean capital gains tax for the year.

How Your Brokerage Reports You to the NTS

This is where it matters which brokerage holds your foreign stocks.

⚠️ IBKR users, take note: Interactive Brokers does not report your foreign securities gains to the Korean government. If you trade US stocks through IBKR while resident in Korea, ignoring the 해외양도소득세 obligation is technically tax evasion. The NTS has been actively cross-referencing 환전 (FX conversion) records from Korean banks with overseas brokerage deposits since 2023 — the audit trail exists even when the brokerage doesn't report directly.

Filing: Two Different Paths

Path 1 — Korean Brokerage Holders

During 연말정산 (year-end tax settlement, February) or 종합소득세 신고 (May), the gain is pre-populated on Hometax (홈택스). You verify the figure, confirm the ₩2.5M deduction was applied, and pay any residual tax via bank transfer. Most Korean retail investors never even see this line — it just gets deducted.

Path 2 — US Brokerage Holders (IBKR, etc.)

1. Log into your brokerage and download the annual realized gain/loss report (IBKR: Reports → Tax Forms → Realized P/L). Note: IBKR does not issue a US 1099-B because you are a non-resident — but the realized P/L report shows you what you need.
2. Convert each lot's gain from USD to KRW using the transaction-date exchange rate (사실상 취득 당시 및 양도 당시의 환율). The NTS accepts the Tibank 기준환율 (basic exchange rate) of the relevant date.
3. Sum total gains, apply the ₩2.5M deduction, compute 22% on the excess.
4. File through Hometax → 종합소득세 → 해외양도소득 section, by May 31.
5. You must also file the 해외금융계좌 신고 (foreign financial account report) if the year-end balance of your IBKR account exceeds ₩500 million (≈ $370K) — a separate filing from the capital gains tax itself, due June 30 of the following year.

The ISA Strategy: Shielding Up to ₩2M More

The Korean ISA (개인종합자산관리계좌, in force since 2024) wraps foreign stock gains in a tax-preferred envelope. For a general ISA (일반형):

• Foreign assets can make up to 30% of total ISA assets (raised from 20% pre-2025).
• Annual contribution limit: ₩20 million (raised to ₩30M from 2025 under recent revisions — verify current limits).
• On maturity (default 5 years), gains attributable to ISA assets receive a ₩2 million deduction against the 9%/16% ISA preferential tax rate (vs the standard 22% on overseas capital gains outside an ISA).

Combined with the ₩2.5M annual 외양도 deduction, a Korean investor who keeps foreign stocks in an ISA can effectively shelter around ₩4.5M (~$3,300) of annual foreign stock gains from the regular 22% rate.

💡 전략 요약: ISA 계좌 안에서 미국 ETF 30% 비중까지 허용. 만기 5년 후 2백만원 공제 + 9% 또는 16% 우대세율. ISA 밖 250만원 + ISA 안 200만원 = 연간 약 450만원의 해외 주식 양도차익을 정규 22% 세율에서 보호 가능.

Capital Gains vs Dividends: Don't Confuse the Two Taxes

A common point of confusion is mixing the two overseas stock tax streams. They are entirely separate:

A common miscalculation: a Korean investor sells a US stock for a $5,000 gain and assumes the 15% dividend withholding rate applies. It does not — dividends and capital gains are taxed under different articles of the treaty, and the 15% never touches your capital gains. The full 22% (minus the ₩2.5M deduction) is what Korea wants.

Special Cases

Case 1: You Move to the US Mid-Year

If you become a US tax resident during the year (e.g., you arrive on an H-1B and pass the substantial presence test), gains realized before your US residency starts are taxed in Korea; gains after are taxed in the US. You may need to file both a Korean 종합소득세 return and a US 1040-NR for the split year.

Case 2: You Hold ADRs of Korean Companies in the US

Buying 삼성전자 (Samsung) via the SSNLF ADR on the US OTC market sounds exotic — but Korea will still tax the gain as a Korean resident when you sell. The location of the listing doesn't determine where tax is owed; residency does.

Case 3: Crypto Held Outside Korea

Not technically "foreign stocks," but the same principle applies: Korean residents must report overseas crypto exchange gains as 해외양도소득세 on the same May 31 deadline, with the same ₩2.5M deduction.

TL;DR

• Korean residents pay Korean capital gains tax on overseas stocks (해외양도소득세) — the US does not withhold on your sale profits under Article 13 of the Korea-US Tax Treaty.
• Annual basic deduction: ₩2,500,000 (~$1,850) — if your yearly overseas capital gains are at or below this, you pay zero.
• Above ₩2.5M: 22% (20% national + 2% local) applied to the excess, not the full gain.
• Korean brokerages report automatically. Direct US brokerages (IBKR, Firstrade) do not — you must self-file through Hometax by May 31 of the following year.
• IBKR users: FX conversions via Korean banks create a paper trail. The NTS can reconstruct your gains even without broker reporting.
• ISA shelter: Holding foreign ETFs inside a Korean ISA adds up to ₩2M more in gains at preferential 9%/16% rates instead of 22%.
• Dividends and capital gains are separate tax streams — don't apply the 15% W-8BEN dividend rate to your stock sale profits.
• Plan around December: harvest losses to stay under the ₩2.5M annual cap.