Understanding Korea capital gains tax for foreigners 2026 is essential before you sell Korean shares, property, or other assets. The rules differ sharply depending on whether you are a resident or non-resident, what you are selling, and whether a tax treaty applies. This guide explains the capital gains tax rates on listed and unlisted shares, real estate, and the withholding mechanism for non-residents, with worked examples and a clear path to claim treaty relief at source.
In short, the Korea capital gains tax for foreigners depends on three levers: your residency status, the asset class, and your home-country tax treaty with Korea. We unpack each below.
Your tax outcome starts with residency. A resident foreigner (broadly, someone with a domicile or 183+ days of residence in Korea) is generally taxed on worldwide capital gains under domestic rules. A non-resident is taxed only on Korea-source gains—chiefly Korean shares and Korean real estate. Because residency drives everything, confirm your status using our Korean tax residency rules for foreigners 2026 guide before applying any rate below.
For non-resident foreigners, the headline rule on share sales is a lower-of withholding formula: the withholding agent applies the lesser of 11% of gross sale proceeds or 22% of the net realized gain (both figures include the 10% local surtax on the underlying national rate). Crucially, small non-resident shareholders selling listed shares on the exchange are frequently exempt or relieved—either by domestic small-shareholder rules or by a tax treaty.
| Scenario | Typical Treatment (Non-Resident) |
|---|---|
| Small holding, listed shares, on-exchange | Often exempt / treaty-relieved |
| Large holding above ownership threshold | Taxable: lower of 11% proceeds or 22% gain |
| Off-market / unlisted share sale | Taxable: lower of 11% proceeds or 22% gain |
| Treaty exemption documented in advance | Reduced or zero withholding at source |
Korean real estate gains are taxed on the same progressive structure as for residents, based on the net gain after acquisition cost and a holding-period adjustment, plus a 10% local income surtax on the income tax. Short holding periods attract substantially higher rates to discourage speculation. Foreigners rarely qualify for the resident one-house exemption, so a foreign owner selling Korean property typically faces full capital gains tax.
| Holding Period | Indicative Rate Band (2026) | Plus Local Surtax |
|---|---|---|
| Under 1 year | Higher flat rate (often 50%+ for some property) | +10% of the tax |
| 1–2 years | Elevated flat / progressive | +10% of the tax |
| 2 years and over | Progressive 6%–45% scale | +10% of the tax |
Korea has an extensive treaty network. Many treaties allocate the taxing right on share gains to your country of residence, effectively exempting on-exchange listed-share gains for small non-resident holders in Korea. To benefit, you generally must file a treaty exemption/limitation application or provide a residence certificate to the withholding agent before the transaction so they reduce withholding at source. If withholding has already occurred, you may claim a refund by filing with the National Tax Service.
Suppose a non-resident sells listed Korean shares for 100,000,000 KRW with a cost basis of 80,000,000 KRW (net gain 20,000,000 KRW), and no treaty relief is documented in advance. The withholding agent compares:
The lower figure—4,400,000 KRW—is withheld. Had a treaty exemption been filed in advance, the withholding could have been reduced or eliminated, illustrating why documentation timing matters so much.
For real estate, a preliminary capital gains return is generally due within two months from the end of the month in which the transfer occurs, with a final reconciliation the following May if needed. For share sales by non-residents, the securities company or buyer withholds and reports at the time of the transaction, so there is usually no separate filing unless you are reclaiming treaty relief.
The Korea capital gains tax for foreigners extends beyond listed shares and real estate. Unlisted (private) shares sold by non-residents are generally taxable using the same lower-of formula—11% of proceeds or 22% of the gain—without the small-shareholder listed-share relief, so private equity stakes and pre-IPO holdings are more often caught. Real-estate-rich company shares can be treated like property under anti-avoidance rules, meaning a share sale in a company whose value is dominated by Korean real estate may be taxed as a property disposal. Derivatives and certain financial instruments have their own regimes. The practical lesson is that the asset's legal form and the company's underlying assets both matter; do not assume a share sale automatically gets listed-share relief.
Because treaty relief usually must be arranged before the transaction, follow this sequence to avoid over-withholding on your Korea capital gains tax:
For foreigners, the currency in which you measure your gain can matter. Korean capital gains tax is computed in won, so a gain in KRW terms is what is taxed—even if, measured in your home currency, the gain is smaller or larger because the exchange rate moved between purchase and sale. Track the USD/KRW trend with our USD to KRW exchange rate forecast 2026 if currency timing affects your decision to sell. Keep clean records of your acquisition cost, related expenses (brokerage, certain transaction taxes), and the disposal price, since an accurate cost basis directly reduces the taxable gain under the 22%-of-gain calculation.
For non-resident foreigners selling Korean listed shares, capital gains tax is generally collected by withholding at the lower of 11% of the sale proceeds or 22% of the net gain (including local surtax), subject to tax-treaty relief. Real estate gains are taxed on a progressive scale that can reach the mid-40% range plus local surtax.
Small non-resident shareholders selling listed shares on the exchange are often exempt or relieved under a tax treaty. Larger shareholders above the ownership threshold, and off-market sales, are typically taxable by withholding. Your treaty and ownership percentage determine the outcome.
Real estate capital gains for foreigners follow the same progressive rates as residents, based on the gain after acquisition cost and holding period, with higher rates for short holding periods. Local income surtax of 10% of the income tax is added on top.
Yes. Many of Korea's tax treaties exempt or reduce capital gains on shares for non-residents, especially small shareholdings in listed companies. You must usually file a treaty application or provide a residence certificate to claim relief at source.
For non-residents, the securities company or the purchaser typically withholds the tax at the time of the transaction and remits it to the National Tax Service, applying the lower-of formula unless treaty relief is documented in advance.
Korea offers a one-house exemption for residents meeting holding and residency conditions. Non-resident foreigners usually do not qualify, so a foreign owner selling Korean property generally faces full capital gains tax.
For real estate, a preliminary return is due within two months of the end of the month of transfer, with a final return in May of the following year if required. For shares subject to withholding, the withholding agent reports at the time of sale.
Resident foreigners are taxed on worldwide capital gains under Korean rules, though long-term residents may have specific provisions. Non-residents are taxed only on Korea-source gains. Your residency status, determined by days and ties, is decisive.