Global Daily Tax News, Korea Announces Tax Breaks To Shore Up The Won, (Dec 31, 2025)

To counter the recent fall in the value of the Korean won, the South Korean Government has announced various tax measures to shore up the currency.

The measures include a capital gains tax concession for individual investors divesting of overseas stocks held as of December 23, 2025, providing the proceeds are converted into Korean won and invested, for at least one year, in shares in domestic entities. Specifically, capital gains tax will be exempted on gains up to KRW50m (USD34,712).

Further, capital gains tax concessions will be granted for futures investment products that include features to minimize individual investors' losses from future currency value fluctuations.

Finally, to mitigate double taxation on dividends received by domestic parent companies from their overseas subsidiaries, the Government will raise the income exclusion ratio for such dividend income from 95 percent to 100 percent.

The Government said, "With the implementation of these tax support measures, it is expected that a substantial portion of individual investors' overseas stock holdings – amounting to USD161.1bn as of the end of the third quarter of 2025 – will be redirected toward domestic investment or hedged against FX risk, thereby leading to an expansion in the supply of foreign currencies."