The Ministry of Economy and Finance (MOEF) will raise the threshold for major shareholders who are subject to capital gains tax to those holding 5 billion won worth of listed stocks from the current 1 billion won.

< Amendments to the criteria for taxable subjects of capital gains tax on listed stocks >

Currently, those who are holding a certain stake in listed stocks or holding stocks of a single company worth at least 1 billion won as of the end of the preceding business year, are subject to a 20 percent capital gains tax if their taxable base is less than 300 million won or a 25 percent capital gains tax if the base exceeds 300 million won.

This measure takes into account the current capital market situation such as high borrowing costs and escalated uncertainties at home and abroad, and are designed to mitigate market volatility caused by year-end stock selling to avoid taxation. 

MOEF plans to finalize the amendments to the Enforcement Decree Of the Income Tax Act, which includes the provisions above, by the end of the year after going through necessary procedures including preannouncement of legislation, consultations with relevant ministries (December 21 to 22), and the Cabinet meeting (December 26). The revised criteria will apply to gains from transactions made after January 1, 2024.

Please refer to the attached files.