Tax Planning
The Exit Tax in South Korea: How HNWIs Facing Relocation Should Plan
For high net worth individuals considering leaving South Korea, understanding “국외전출자 주식등 양도소득세” (exit tax) is crucial to avoid surprises—this article breaks it down with planning tips.
By NomadicTax Research Team • 6 min read • August 31, 2026
## What Is the Exit Tax Regime (국외전출자 주식등 양도소득세)?
Through the so-called “국외전출자 주식등 양도소득세”, South Korea imposes a tax when **resident persons who qualify as “대주주” (significant shareholders)** depart the country—typically via emigration or long-term foreign residency. In essence, upon exit, **unrealized gains** on specified domestic stocks are treated as if sold and taxed. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
### Key Definitions & Requirements
- **국외전출자 (Person Leaving the Country)**: a resident who transfers their address or domicile abroad. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
- **대주주 Criteria**: Being “significant shareholder” involves owning shares above certain thresholds (% ownership or market value), varying by whether it's listed, unlisted, or venture company stock. These thresholds are detailed in 소득세법 시행령 §167의8. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
### Taxable Assets & Gains
- The tax applies to **domestic stock holdings** at exit date, with unrealized gains “evaluated” and treated as realized for taxation. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
- Reporting of **stock ownership details (보유현황 신고)** must occur up to the day before exit. Also, one must appoint a **tax agent (납세관리인)**. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
### Rates, Deadlines, and Reliefs
- Since reforms from January 1, 2019, progressivity applies: up to KRW 300 million of evaluated gain is taxed at **20%**, and amounts over that at **25%**. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
- Filing & payment must happen within **three months** after the exit date. If you’ve appointed a tax agent, you might follow the “확정신고 기간” timelines. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
- You can apply for **deferral**: If you agree to provide tax security (担保) and set up a tax agent, payment may be postponed until the actual sale of those stocks; typically up to **5 years**, or **10 years** for those abroad on study. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))
## Planning Strategies
- **Measure your exposure**: Estimate whether you qualify as “대주주” now—if near the thresholds, any exit could trigger major liabilities.
- **Timing** matters: If gains are likely to climb, exiting earlier might reduce your total evaluated gain. If declines are expected, delaying exit could reduce the tax base.
- **Pre-exit conversions or donations**: Shifting assets before exit—e.g. via structured gifts or trusts—can reduce exposure but must be legally robust.
- **Seek security and agent appointment swiftly** to enable payment deferral if needed.
- **Coordinate cross-border tax treaties**: If your new place of residence has treaties or credits for foreign taxes, you might reduce net tax burden.
## Example
Resident Ms. C is designated a 대주주 holding KRW 10 billion in domestic company shares. The evaluated gain on her holdings is estimated at KRW 500 million by her expected exit date. Under the exit tax:
- First KRW 300 million taxed at 20% → KRW 60 million tax.
- Remaining KRW 200 million taxed at 25% → KRW 50 million tax.
- Suppose she appoints a tax agent and provides required security—often she may defer payment until she sells the shares (or 5 years pass).
## Key Tips for HNWIs
- Review whether you already are a “대주주”. Thresholds differ by share type—public, private, venture, etc. Let’s say if you hold over 1% of certain listed firms or over certain valuation in unlisted ones, you count.
- Document your share acquisitions carefully—dates, prices, supporting documents—since evaluated gains are derived using market value less cost.
- If exits are planned, consult both Korean and local advisors on foreign tax credit availability.
- Understand that new reforms might change thresholds or measures. The current rules stem from law effective as of 2018–2019. ([nts.go.kr](https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?cntntsId=7821&mi=2515&utm_source=openai))