Korea to raise capital gains tax threshold from 1 billion won to 5 billion won
Published: 21 Dec. 2023, 11:13
Updated: 21 Dec. 2023, 14:55
- JIN MIN-JI
- [email protected]
Under the current system, Korea levies tax on shareholders who own stocks of a company worth more than 1 billion won, categorizing them as 'major shareholders.' That threshold will be raised to 5 billion won from Jan. 1.
In the existing framework, major shareholders are those who own more than 1 billion won in a single company or 1 percent share in a Kospi-listed company, 2 percent in a Kosdaq firm or 4 percent in a Konex company.
The major shareholders are levied a 20 percent capital gains tax if their taxable base is less than 300 million won. If the base exceeds 300 million won, the rate goes up to 25 percent.
Retail investors do not pay capital gain taxes when trading local securities. Instead, they pay a 0.08 percent transaction tax when buying or selling stocks on the Kospi and a 0.23 percent tax when trading securities on the secondary market Kosdaq.
"The measure is aimed to reduce volatility at the end of the year to avoid the standard for taxation and in consideration of the capital market amid extended high-interest rate and uncertainties in and outside the country," the ministry said in a statement.
BY JIN MIN-JI, LEE HO-JEONG [[email protected]]
with the Korea JoongAng Daily
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