Tax Planning
Exit Tax (국외전출세) Essentials: For HNWIs Thinking of Leaving Korea
If you’re a major shareholder or thinking about emigrating, Korea’s exit-tax rules can trigger big taxable events even without a sale.
By NomadicTax Research Team • 5-8 min read • August 27, 2026
## What is Exit Tax (국외전출세)?
The exit tax is a rule in the Korean Income Tax Act (소득세법), under **Article 118-9**, that treats certain individuals as having disposed of domestic stock holding **on the day they cease being residents**, even if no sale occurred. This applies to “대주주” shareholders (large owners) under specific criteria. ([taxlaw.nts.go.kr](https://taxlaw.nts.go.kr/qt/USEQTA002P.do?ntstDcmId=200000000000004145&wnkey=cfa5cd7b-4714-4447-a102-7ef42e4c41b0&utm_source=openai))
## Who Triggers Exit Tax?
To trigger the exit tax, you must satisfy:
- **Residency**: You must be a resident who is moving abroad, and over the **past 10 years**, being in Korea (having residence or domicile) for at least **5 years**. ([taxlaw.nts.go.kr](https://taxlaw.nts.go.kr/qt/USEQTA002P.do?ntstDcmId=200000000000004145&wnkey=cfa5cd7b-4714-4447-a102-7ef42e4c41b0&utm_source=openai))
- **Major shareholding**: At the time of the move, you must be a “대주주” per valuation rules (based on kind of stock, whether listed or unlisted, and the ownership ratio or value). ([taxlaw.nts.go.kr](https://taxlaw.nts.go.kr/qt/USEQTA002P.do?ntstDcmId=200000000000004145&wnkey=cfa5cd7b-4714-4447-a102-7ef42e4c41b0&utm_source=openai))
## What Is Taxed, When & at What Rate?
- **What**: Domestic stock and similar securities (both listed and unlisted) are treated as if sold on the day you exit residency. Unrealized gains are taxed. ([taxlaw.nts.go.kr](https://taxlaw.nts.go.kr/qt/USEQTA002P.do?ntstDcmId=200000000000004145&wnkey=cfa5cd7b-4714-4447-a102-7ef42e4c41b0&utm_source=openai))
- **Crossing dates**: If you satisfy the above residency and major share criteria **as of your departure date**, the exit tax applies. ([taxlaw.nts.go.kr](https://taxlaw.nts.go.kr/qt/USEQTA002P.do?ntstDcmId=200000000000004145&wnkey=cfa5cd7b-4714-4447-a102-7ef42e4c41b0&utm_source=openai))
- **Rates**:
• If exit is before **Dec 31, 2018**, flat **20%** on total gains.
• On or after **Jan 1, 2019**, gains up to ₩300 million taxed at 20%, amounts exceeding ₩300 million at **25%**. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2355&utm_source=openai))
## Reporting & Administrative Duties
- **Before exit**: File **domestic stock holding status** (주식등 보유현황 신고) prior to leaving. Also, **appoint a tax-agent** (납세관리인) to handle ongoing compliance. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2355&utm_source=openai))
- **After exit**: File the exit tax return within **three months** after the end of your departure month. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2355&utm_source=openai))
- **Late or deficient filings** incur **penalties** (“가산세”)—including failure to appoint agent or submit required statements. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2355&utm_source=openai))
## Example
Imagine you’re a resident who owned **listed stock** worth ₩500 million as a major shareholder. The actual acquisition cost was ₩200 million. You decide to move abroad in 2026 and are subject to exit tax. Gains = ₩300 million. Since this is after 2019, the first ₩300 million falls at 20%, but since your gains equal exactly ₩300 million, all gains taxed at 20%. If your gains were ₩400 million, then first ₩300 million taxed at 20%, excess ₩100 million taxed at 25%.
## Planning Strategies for HNWIs
- **Time your exit**: Exiting prior to ownership reaching thresholds may avoid having status of “대주주.” But artificially massaging ownership can carry risks of challenge.
- **Sales before exit**: Selling stock before moving may crystallize gains and let you perhaps take advantage of lower rates or deduct costs more easily.
- **Appoint a reliable tax agent**: Ensures reporting done timely and detail template filings (e.g. stock holdings, acquisition date, ownership ratios) are accurate.
- **Assess partial exits or partial listing changes**: For instance, reducing ownership below major thresholds or transferring holdings gradually could mitigate burden—but watch anti-avoidance rules.
## Why It Matters
Even without a sale, the exit tax treats you as if you sold stock—so **substantial “phantom gains” may become taxable**. Combined with the new crypto regime starting 2027, HNWIs navigating cross-border moves must plan carefully. Because many rules depend on definitions set by presidential decree, **advance counsel and accurate documentation** are essential. Tools like residency history, stock ownership records, and registrations with foreign residency are part of your toolkit.