Korea’s Exit Tax: What Foreigners Leaving Korea Need to Know

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Korea’s Exit Tax: What Foreigners Leaving Korea Need to Know

“I’m planning to leave Korea and move abroad. Will I have to pay tax on the stocks I own?”

If you are a foreigner living and working in Korea and planning to move abroad, it is important to understand Korea’s Exit Tax before you leave.

What Is Korea’s Exit Tax?

Korea’s Exit Tax may apply to unrealized gains on certain stocks and other assets when a person who meets specific requirements leaves Korea.

In simple terms, even if you have not actually sold your stocks, you may be treated as having transferred them on the date you leave Korea, and tax may be calculated accordingly.

The purpose is to prevent taxpayers from leaving Korea with appreciated stocks and selling them overseas to avoid Korean tax.

What Will Change From 2027?

Currently, the Exit Tax mainly applies to certain domestic stocks and other qualifying assets.

Starting January 1, 2027, certain overseas stocks will also be included in the Exit Tax system.

However, simply owning overseas stocks does not automatically mean that the Exit Tax will apply.

The application depends on factors such as the type and value of the assets, your period of residence in Korea, your departure date, and other statutory requirements.

There are also rules that exclude certain taxpayers when the total transfer value of their overseas stocks and other qualifying assets is below a specified threshold.

An Important Exception for Foreign Employees

Foreign employees who have worked in Korea should pay particular attention to the exception rules.

Under certain conditions, qualifying foreign employees may be excluded from the Exit Tax on overseas stocks and other qualifying assets.

One important requirement is related to foreign employees who provided services in Korea for at least 80% of the relevant period during which they maintained a Korean address or residence before departure.

However, meeting the 80% requirement alone does not automatically qualify someone for the exception. Other statutory requirements, including the timing of departure after ending employment, must also be considered.

Planning to Leave Korea?

With overseas stocks scheduled to be included in Korea’s Exit Tax system from 2027, foreigners who own overseas stocks should review their situation before leaving Korea.

This is especially important for foreigners who have worked in Korea for a long period and may qualify for the 80% employment-related exception.

If you are planning to leave Korea and hold a significant amount of domestic or overseas stocks, we recommend consulting a qualified tax professional before your departure.

A tax professional can review your residency history, employment history, investments, and applicable exceptions to help determine whether the Exit Tax applies to you.

Planning ahead can help you understand your tax obligations and avoid unexpected tax issues when leaving Korea.