Government Considers Easing Capital Gains Tax on Stocks... Raising Major Shareholder Threshold from 1 Billion KRW to 10 Billion KRW

The government is reportedly planning to significantly ease capital gains tax on stock transfers. Currently, 'major shareholders' who hold more than 1 billion KRW worth of listed stocks per item as of the end of each year are subject to capital gains tax, but the plan is to raise the threshold per item to reduce the number of taxpayers.

According to political circles on the 10th, the government and the Presidential Office are internally reviewing this plan to ease capital gains tax on stocks. It is known that they plan to establish detailed measures and announce them soon.

The measures are expected to include raising the major shareholder threshold subject to capital gains tax from 1 billion KRW (or 1?4% ownership) per item to 5 billion KRW, 10 billion KRW, or more.

Previously, the major shareholder threshold for the Korea Stock Exchange was lowered from 10 billion KRW at its introduction in 2000 to 5 billion KRW in 2013, then to 2.5 billion KRW in 2016, 1.5 billion KRW in 2018, and finally to 1 billion KRW.

It is also known that this new measure is likely to ease the major shareholder requirements by applying past standards. In particular, since the major shareholder criteria are stipulated in enforcement ordinances rather than laws, the government can revise them autonomously without going through the National Assembly's legislative process.

If the major shareholder criteria are revised in this way, only a very small number of individual investors holding tens of billions of KRW or more in listed stocks per item will be subject to capital gains tax. This can also prevent market distortions where major shareholders rush to sell stocks at the end of the year to avoid taxation.

The abolition of capital gains tax on stock transfers was also a campaign pledge of President Yoon Suk-yeol.

This content was produced with the assistance of AI translation services.