US Stock Taxes for Korean Residents: 22% Capital Gains Tax, 2.5 Million Won Deduction, 15% on Dividends (2026)

Two taxes on US stocks

For a Korean resident buying and selling US stocks through a Korean broker, there are two main taxes: capital gains tax when you sell at a profit, and dividend tax when you receive dividends. Unlike Korean shares, there is no Korean securities transaction tax on each sale, though a tiny US regulatory fee may be charged on the sale amount. The biggest difference is that while gains on listed Korean shares are untaxed unless you are a major shareholder, gains on foreign shares are taxed for everyone once a year's profit exceeds the basic deduction, and you must file yourself. This guide follows the Income Tax Act as of October 2026.

How capital gains tax is calculated

Capital gains tax is calculated after netting all gains and losses on foreign shares sold between 1 January and 31 December. For each stock, subtract the acquisition cost and expenses such as commissions from the sale proceeds; add these results together, deduct 2.5 million won per person per year, and multiply by 22% (20% capital gains tax plus 2% local income tax). The 2.5 million won deduction is applied only once, shared with any taxable Korean share trades (such as major-shareholder sales). For example, if in one year stock A made a 12 million won gain and stock B a 4 million won loss, the net gain is 8 million won; subtracting 2.5 million leaves 5.5 million, and 22% of that is 1.21 million won of tax. If losses are larger, there is no tax, but the leftover loss cannot be carried into the next year.

• Gain or loss per stock = proceeds − cost − expenses
• Annual total − 2.5 million won = taxable base
• Tax = taxable base × 22%
• No carry-forward of losses

How exchange rates enter the tax

Acquisition cost and sale proceeds are each converted into won at the base exchange rate on the day the money changed hands. So even if the share price is unchanged, a rise in the exchange rate creates a won-denominated gain that is taxable. If you buy 100 shares at $100 when the rate is 1,300 won and sell them at the same $100 when the rate is 1,400 won, the cost is 13 million won and the proceeds 14 million won, a 1 million won gain. Conversely, you can profit in dollars but record a loss in won if the rate falls. Even if you sell for dollars and keep them, the calculation is fixed at the rate when you sold. The effect of exchange rates on returns is covered further in the guide on exchange rates and overseas stocks.

Filing and payment

Unlike Korean shares, foreign share gains have no half-yearly preliminary return; you file and pay once, between 1 and 31 May of the following year. You can file yourself through Hometax or use a broker's filing service. If you use several brokers, gains and losses at all of them must be combined, so take care not to hand one broker the job and leave out other accounts. If you have gains above the deduction and do not file, a non-filing penalty (generally 20% of the tax due) and a late-payment penalty apply. If your gain is 2.5 million won or less and no tax is due, not filing carries no penalty, but keeping a record makes the next year easier.

• Filing period: 1–31 May of the following year
• Method: Hometax or a broker's service
• Combine gains and losses across all brokers
• Penalties for not filing

Dividend tax

Under the Korea-US tax treaty, US dividends usually arrive after 15% has been withheld in the US. Because that is already higher than the Korean dividend tax rate (14%), Korea typically takes nothing further. But these dividends count as Korean financial income, so if interest and dividends together exceed 20 million won in a year, the excess is taxed together with your other income, with the US tax credited as a foreign tax credit. Distributions from US ETFs work the same way, though some products may face different withholding depending on the nature of the distribution. When looking at a dividend yield, recalculating it with 15% removed is more accurate.

How Korea-listed US ETFs differ

You can buy an S&P 500 or Nasdaq-100 product either as an ETF listed on a US exchange or as a Korea-listed ETF tracking the same index. They are taxed differently. A US-listed ETF is treated like foreign shares: 22% capital gains tax after the 2.5 million won deduction, kept separate from other income. For a Korea-listed overseas-index ETF, both trading gains and distributions count as dividend income with 15.4% withheld; there is no deduction, but no filing is needed, and the income counts toward the 20 million won financial income total. Korea-listed ETFs can also be held in tax-advantaged accounts such as pension savings, individual retirement pensions (IRP) and ISAs to defer or reduce tax. Which is better depends on the size of the gain, your other financial income, the holding period and the account type.

• US-listed ETF: 22% after the 2.5 million won deduction, taxed separately, self-filed
• Korea-listed overseas ETF: 15.4% withheld on gains and distributions, counted in financial income
• Tax-advantaged accounts (pension savings, IRP, ISA) can hold only Korea-listed ETFs

Year-end and family pitfalls

The timing of a sale is based on the settlement date when money changes hands, so shares sold just before the last trading day of December may settle in the new year and count as next year's income. The US has settled trades on the next business day (T+1) since 28 May 2024, but Korean brokers announce their own year-end settlement cut-off, so check that date. Realising gains up to 2.5 million won within the year, or selling losing positions to offset gains, are common year-end moves, but weigh the trading and currency costs and the price difference when you buy back. Also, from 2025, if you receive foreign shares as a gift from a spouse or lineal relative and sell them within a year, the gain is calculated using the giver's acquisition cost, so raising the cost basis through a gift has no effect unless you hold for more than a year.

2026 temporary breaks: the domestic market return account and the hedging deduction

In 2026 there are two temporary breaks related to foreign share capital gains tax (Restriction of Special Taxation Act, Articles 91-26 and 91-27, added in April 2026). First, if you sell foreign listed shares held on or before 23 December 2025 through a domestic market return account by 31 December 2026, and keep the money in Korean listed shares or Korean equity funds and the like for a year, a share of the capital gain is deducted: 100% for sales in January to May, 80% in June and July, and 50% in August to December. The share can be reduced to reflect, for example, new foreign share purchases in the same year, and the deposit limit is 50 million won across all financial firms combined. Withdrawing the principal within a year means repaying the tax relief plus interest. Second, investing by the end of 2026 in designated derivatives that reduce currency risk lets you deduct 5% of the amount invested from your 2026 foreign share gains (up to 5 million won). Check the enforcement decree and your broker's guidance for the detailed calculations.

Calculating with this site's tools

Enter the won-converted purchase and sale amounts in the foreign shares tab of the Stock Tax Calculator to see the after-tax realised gain with commissions, the 2.5 million won deduction and the 22% rate applied. Every rate field can be edited, so you can try other years' rules. In the Dividend Calculator, enter your shares and dividend per share and change the tax rate field to 15% to see the after-tax amount of a US dividend. The Today's Exchange Rates tool shows the dollar-won trend, giving a sense of how much the rate has affected your cost and proceeds.

Limits and disclaimer

This guide summarises the general structure of the Income Tax Act and the Restriction of Special Taxation Act as of October 2026. Actual tax can differ depending on residency, major-shareholder status, the legal nature of a product and how your broker processes it, and tax law can change every year. The example figures are assumptions to show the calculation. Before filing, check National Tax Service guidance and your broker's statements, and consult a tax professional for large amounts. This guide is not tax or investment advice.