Korea's exit tax will cover foreign shares from 2027 — applying to departures on or after 1 January 2027

The exit tax sits in Article 118-9 and following of the Income Tax Act. A resident who leaves Korea, typically to emigrate, and meets two conditions is treated as having disposed of their shares on the departure date and is taxed on the resulting capital gain. First, the periods during which they had a domicile or place of residence in Korea over the ten years up to departure must add up to five years or more. Second, as at the end of the year before the year of departure, their shareholding ratio and market value must exceed the large-shareholder threshold. Fail either condition and the tax does not apply.

What changes on 1 January 2027 is what counts as leaving with you. Until then only domestic shares are included; the amendment adds foreign shares. The stated legislative purpose is to secure Korean taxing rights over foreign shares and to even out treatment across asset types. However, the scope of which foreign shares are covered is delegated to a Presidential Decree, so the boundaries are not fixed until that decree is issued. As of this writing no scope has been confirmed, so no figures or thresholds can be stated in advance.

The rest of the framework is unchanged. For departures on or after 1 January 2019 the rate is 20% on a tax base up to 300 million won and 25% on the portion above that. The return and payment are due within three months from the last day of the month of departure, or within the ordinary capital gains final return period if a tax manager has been reported. Reporting a tax manager and providing tax security allows payment to be deferred from the departure date until the shares are actually sold — for up to five years, or ten years in the case of study abroad. The departing resident must also report their shareholdings to the head of the competent tax office by the day before departure.