South Korea Keeps Capital Gains Tax Threshold at Current Level of 5 Billion Won

Strategic Insights -

The South Korean government has maintained the threshold for capital gains tax on stock holdings at the current level of 5 billion won (US$3.6 million), despite initial proposals to lower it to 1 billion won. Finance Minister Koo Yun-cheol announced the decision on Monday, citing the "public's desire" and calls from the ruling Democratic Party (DP) for measures to boost the capital market. The government's decision is seen as a reversal of the initial proposal, which sparked concerns of a potential decline in investor sentiment.

Key Takeaways:

  • The South Korean government has decided to keep the threshold for capital gains tax on stock holdings at 5 billion won (US$3.6 million).
  • The initial proposal to lower the threshold to 1 billion won was met with concerns from financial circles and the ruling Democratic Party (DP) about potential negative impacts on investor sentiment.
  • Finance Minister Koo Yun-cheol cited the "public's desire" and the DP's call for measures to boost the capital market as reasons for maintaining the current threshold.
  • President Lee Jae Myung had previously expressed hesitation about the proposal, stating that there was "no need to insist" on it if it hurts investor sentiment.
  • The government aims to support company growth and the national economy through capital market revitalization and productive finance.
  • Major shareholders will remain subject to capital gains tax on stock transactions.
  • The decision comes after a policy consultation meeting between the government and the DP.

Statistics:

  • 5 billion won (US$3.6 million): the current threshold for capital gains tax on stock holdings.
  • 1 billion won: the initially proposed threshold for capital gains tax on stock holdings.
  • 3.6 million US dollars: the approximate value of the current 5 billion won threshold.
  • N/A: no statistics available.

Sources:

  • Yonhap News Agency (15 September 2025)
  • Ministry of Economy and Finance (proposed tax reform plan in July)
  • President Lee Jae Myung (press conference)