Digital Nomad
Exit Tax Expansion & Overseas Asset Reporting: What Expats Must Do
From Jan 1, 2027, South Korea will expand its exit tax regime to include overseas shares and further strengthen reporting duties for foreign assets and trusts — meaning expats and dual-nationals must be more vigilant than ever.
By NomadicTax Research Team • 7 min read • September 11, 2026
## What Is Korea’s Exit Tax (국외전출세)?
- Established by law in **December 2024** (법률 제21221호), effective **January 1, 2025**, for certain **major shareholders (대주주)** who depart Korea with domestic shares. Unrealized gains are “deemed” sold on the **departure date**, triggering capital gains inclusion. ([law.go.kr](https://www.law.go.kr/lsLawLinkInfo.do?chrClsCd=010202&lsJoLnkSeq=1000226211&utm_source=openai))
- Conditions for triggering include having lived in Korea for at least **5 out of the 10 years** before departure and owning shares meeting major shareholder tests as of the year prior to exit. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
## 2027 Expansion to Overseas Shares
- As of **January 1, 2027**, **overseas-issued or overseas listed shares** will also be subject to exit tax. For these stocks, **major shareholder status is not required**. ([assets.kpmg.com](https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/2026/03/fa26-066.pdf.coredownload.pdf?utm_source=openai))
- Some key exemptions:
* Total overseas stock value ≤ **KRW 500 million**,
* Foreign workers who have worked ≥ 80% of the last 10 years in Korea,
* Foreign worker’s spouse/minor children, if overseas stocks were acquired *before* the worker began employment in Korea, provided the worker departs within **6 months** after end of service. ([assets.kpmg.com](https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/2026/03/fa26-066.pdf.coredownload.pdf?utm_source=openai))
## Increased Duties for Reporting Foreign Assets & Trusts
- **Overseas Financial Account Reporting** and **overseas trusts (해외신탁 신고제도)** have been mandated with specific deadlines and penalties. For example, accounts with a year-end balance > KRW 500 million must be reported. ([nts.go.kr](https://nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7819&mi=2513&utm_source=openai))
- Whistle-blower incentives (포상금) have increased for tips about non-compliance. ⚠️ Penalties for misreporting or failing to report can be steep. ([nts.go.kr](https://www.nts.go.kr/nts/na/ntt/selectNttInfo.do?bbsId=1028&mi=2201&nttSn=1354611&utm_source=openai))
## Issues & Practical Advice for Expats
- Determine first if you are a **resident** (주소 또는 거소) under Korean tax law; only residents are subject to exit tax. Prove periods of stay over past 10 years.
- Catalogue overseas shares and financial accounts; value them as of departure date. Watch for exemption thresholds.
- Consult whether major shareholder thresholds apply in your situation. Global mobility assignments need careful planning — exit timing, assignment length, shareholding structure all matter.
- For overseas trusts, determine if you have “substantial control”: rights to appoint beneficiaries, terminate trust, etc., may trigger full reporting obligations.
## Scenario
> **Kim**, a US citizen working in Seoul since 2019, owns $400,000 (≈ KRW 600 million) in US-market equities and $50,000 in foreign crypto. She plans to return to the US on **March 31, 2027**.
> - Under the new rule from Jan 1, 2027, her overseas shares may be subject to exit tax because they exceed **KRW 500 million**.
> - Because she has been in Korea 8 of the past 10 years (≥ 5), and exit occurs after Jan 1, 2027, she may owe exit tax even though she isn’t a major shareholder domestically.
> - Planning options: dispose of or gift some foreign shares before Jan 1, 2027; ensure trusts are correctly structured; possibly exit within certain deployment windows.
## Compliance Checklist
- Declare exit tax obligation with local tax office **within three months** after departure month. Include full inventory of domestic and overseas shares when applicable. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
- File overseas financial account and overseas trust reports by their respective deadlines (typically **June 30** of the following year). But for overseas trusts, domestic rules state if financial accounts are disclosed, trust report may take priority. ([nts.go.kr](https://www.nts.go.kr/nts/na/ntt/selectNttInfo.do?bbsId=1028&mi=2201&nttSn=1354611&utm_source=openai))
- Keep detailed valuation documentation especially for overseas securities. Currency conversions, date stamps matter.
- Be mindful of whistle-blower programs; accurate reporting can reduce exposure to penalties.
## Final Thoughts
Korea’s tightening of exit tax and asset reporting regimes reflect regional trends emphasizing global mobility, anti-avoidance, and transparency. For expats, dual nationals, or HNWI considering departure, proactive structuring and early action **before January 1, 2027** could offer meaningful mitigation. Always consult a cross-border tax professional to tailor planning to your residency status and investment mix.