Foreign stock capital gains tax 2.5 million won exemption: from filing to loss offsetting

If you made gains on foreign stocks, you may need to report them aggregated at year end.

Retail investor:

"A 250만원 deduction sounds fine, right?"

No, it is a deduction, and reporting plus tax calculation are separate matters.

Key answer up front

A 250만원 basic deduction applies.

You offset gains and losses within the same tax year at year end.

Most filings are done during the next May income tax filing period.

(Confirm latest rates and rules with the tax authority or a tax advisor as laws can change.)

Overseas stock capital gains tax refers to tax on profits from selling foreign stocks.

Loss offsetting means subtracting losses from gains within the same year to determine the taxable base.

The 250만 원 basic deduction is the amount deducted first from annual net gains.

How to calculate gains and losses

Calculate as 'sale price - acquisition cost - transaction fees.'

Foreign exchange gains and losses are included.

Collect broker statements, currency exchange receipts, and fee receipts.

Who and how performs year-end netting

Aggregate all overseas stock trades within the tax year (January to December).

If you have losses, subtract them from gains to lower taxable income.

Confirm whether automatic netting with domestic stocks applies, as it may not.

What documents to prepare for filing

Prepare original transaction records (buy and sell) or supporting documents.

Key items are broker-provided profit and loss statements, exchange receipts, and fee proofs.

Include any withholding certificates related to foreign-sourced income if available.

Step-by-step filing for beginners

→ 1. Organize transaction records: prepare year-by-year buy, sell, fee, and exchange rate records.

→ 2. Calculate gains: compute sale gains and aggregate annually.

→ 3. Apply basic deduction: apply the 250만원 deduction to annual net gains.

→ 4. Fill the form: enter the figures in the relevant section of next May's income tax return.

→ 5. Submit and pay: file electronically or at a tax office, then pay any due tax.

If still stuck:

Follow the National Tax Service HomeTax electronic filing guide or consult a tax advisor.

Things to watch when filing

If overseas broker data and domestic filing data mismatch, you may receive a request for documentation.

Apply the exchange rate based on the trade date rules when converting currency.

Penalties may apply for past missing transactions or documentation.

So what to start with

→ 1. Download this year’s transaction CSV or statements first.

→ 2. Organize exchange and fee receipts into a folder.

→ 3. Check the National Tax Service latest guidance or consult a tax advisor right before filing.

For reference only.

PickStock 💡

※ Investment decisions and responsibility rest with the investor.

※ Figures are as of the time of writing and may change.

※ This article is for information purposes and is not investment solicitation.