Share taxes in three branches: trading, gains and dividends. How losses are counted, what foreign shares add, and the records to keep through the year.
Share-related taxes divide broadly into three: tax on the transaction itself when selling, tax on the gain when there is a profit, and tax on dividends received. They are different in nature, so knowing only one leads to miscalculating the total burden. Transaction taxes can apply even where the trade made a loss.
Gain taxation generally applies to the sale amount minus the purchase amount and costs. Proving the acquisition price is what matters here. Where the date and price of purchase cannot be confirmed, the calculation can go against you. Buying the same stock in several tranches also brings rules about which lots are treated as sold, which changes the result.
Many systems net gains and losses within the same period, taxing what remains after offsetting a profit in one holding against a loss in another. The scope of offsetting and whether losses carry forward differ by system, so mixing domestic and foreign trading means checking both sets of rules.
For foreign shares, the exchange rates at purchase and sale enter the gain calculation. A gain or loss can arise from currency movement even with the share price unchanged. Dividends are also frequently taxed at source in the other country, and separate rules govern how that is treated when calculating at home.
Rates, allowances and filing obligations vary by country and year and change frequently. Applying an older article or another country's example is error-prone. This piece explains only the frame of which tax attaches at which stage. For large amounts or mixed domestic and foreign trading, checking with a tax professional costs less in the end.
As of October 2026, the picture for Korean residents is as follows. Selling listed Korean shares incurs securities transaction tax on the sale amount. For sales from 1 January 2026, KOSPI shares carry 0.20% (a 0.05% transaction tax plus a 0.15% special tax for rural development) and KOSDAQ shares 0.20%; in 2025 both were 0.15%. Trading gains are not taxed unless you are a major shareholder, meaning you hold 5 billion won or more of one company, or at least 1% of a KOSPI company or 2% of a KOSDAQ company. The financial investment income tax that was due to start in 2025 was abolished by an amendment to the Income Tax Act in December 2024, so this structure remains in place. For foreign shares, a year's gains and losses are netted, 2.5 million won is deducted, and 22% is due (20% capital gains tax plus 2% local income tax); you file yourself the following May. Dividends have 15.4% withheld, and if combined interest and dividend income exceeds 20 million won in a year, the excess is taxed together with your other income. Rates and thresholds can change with tax law amendments, so check the National Tax Service's guidance before filing.
Two time-limited tax breaks arrived in 2026. The first is separate taxation of dividends from high-dividend companies. Dividends paid by listed companies that meet conditions such as a payout ratio, for fiscal years up to the one containing 31 December 2028, can be taxed at separate rates of 14 to 30% instead of being added to your other income (Restriction of Special Taxation Act, Article 104-27). The second is the domestic market return account. If you sell foreign shares you held on or before 23 December 2025 through this account by 31 December 2026 and keep the money in Korean shares and similar assets for a year, a set share of the capital gain is deducted. For sales from August 2026 the share is 50%, and the deposit limit is 50 million won across all financial firms combined (same Act, Article 91-26). The detailed calculations for both follow the enforcement decree and National Tax Service guidance, so check them before relying on either. More detail is in the guides on separate taxation of high-dividend company dividends and on US stock taxes.
Tax headaches usually come not from year-end but from not keeping records all year. If you use several brokers, you need each one's transaction history, and for foreign shares you need the exchange rate at purchase and sale. Stock splits, mergers and bonus issues that change quantity or cost basis need to be recorded too. Most brokers issue annual transaction statements or capital gains calculation reports, so download them before filing season. When moving accounts or switching brokers, get the old account's history first — it may be harder to obtain later.
Tax mistakes usually come less from not knowing the rules than from putting off checking them. Typical cases: foreign share gains exceed the basic deduction but go unreported, leading to penalties; losses are crystallised at year-end just to cut tax, leaving a portfolio different from the plan; or a tax-advantaged account is opened without understanding its early-withdrawal conditions, and the benefits have to be paid back. Tax changes the outcome of investment decisions, but letting tax alone drive those decisions can cause bigger losses. This guide explains types and structures of tax and is not tax advice.
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