How much tax do you actually pay when selling a U.S. ETF? Most Korean investors have heard "22%" but have never worked through the calculation themselves. This guide covers currency gain calculations, how to apply the deduction, and how to file — with real worked examples.
The Basic Structure: 22% on Overseas ETF Gains
When you sell overseas stocks or ETFs (listed on U.S., Japanese, or other foreign exchanges), the following rates apply to your capital gains:
- Capital gains tax: 20%
- Local income tax: 2%
- Total: 22%
And there is an annual 2.5M KRW basic deduction. If your total capital gains for the year are 2.5M KRW or less, you owe zero tax.
Korean-listed ETFs (KODEX, TIGER, etc.) have a different tax structure. This article applies only to ETFs listed on U.S. exchanges (NYSE, NASDAQ).
Calculating Your Gain: KRW Is What Counts
This is where most mistakes happen. Do not calculate in USD. The gain is the difference between your sale proceeds converted to KRW and your purchase cost converted to KRW.
The Formula
Capital gain = Sale proceeds (KRW) − Purchase cost (KRW) − Transaction fees
Taxable income = Capital gain − 2,500,000 KRW (annual deduction)
Tax = Taxable income × 22%
Transaction fees = brokerage commissions on both the buy and sell sides.
Worked Example
100 shares of VOO purchased and sold under the following conditions:
- Buy: $400/share, exchange rate 1,200 KRW/$ → KRW cost = $400 × 100 × 1,200 = 48,000,000 KRW
- Sell: $500/share, exchange rate 1,380 KRW/$ → KRW proceeds = $500 × 100 × 1,380 = 69,000,000 KRW
- Total commissions: 100,000 KRW
Capital gain = 69,000,000 − 48,000,000 − 100,000 = 20,900,000 KRW
Taxable income = 20,900,000 − 2,500,000 = 18,400,000 KRW
Tax = 18,400,000 × 22% = 4,048,000 KRW
Currency Gains: You're Taxed on the FX Move Too
There's an important detail in the example above. In USD terms, the share price rose from $400 to $500 (+25%). But the exchange rate also moved from 1,200 to 1,380 KRW/$ (+15%). The 20.9M KRW gain includes both the stock's price appreciation and the currency gain.
Korean tax law does not separate stock gains from currency gains for overseas ETFs. The KRW difference between sale and purchase is all that matters.
If the exchange rate had fallen by the time you sold, you could have a currency loss that partially offsets your stock gain — meaning even if you profited in USD terms, your KRW capital gain (and therefore your tax bill) could be smaller.
Using the 2.5M KRW Deduction Strategically
The deduction resets every calendar year (January 1 – December 31). Strategies to maximize it:
Split Sales Across Years
If you expect your annual gain to exceed 2.5M KRW, sell part of your position before December 31 and the remainder in January of the following year. You effectively use two years' worth of deductions (5M KRW total).
Harvest Losses Before Year-End
If another ETF in your portfolio is sitting at a loss, sell it before year-end to realize the loss and immediately repurchase. The realized loss offsets your gains from other positions, reducing your taxable income.
Note: Under Korean tax law, immediately repurchasing the same ETF after a loss sale is still recognized as a loss realization. There is a price movement risk between the sell and rebuy, however.
Net Multiple ETFs Against Each Other
If in the same year you made 5M KRW on VOO and lost 2M KRW on QQQ:
- Net gain = 5M − 2M = 3M KRW
- Taxable income = 3M − 2.5M = 500,000 KRW
- Tax = 500,000 × 22% = 110,000 KRW
How to File: May the Following Year
Overseas ETF capital gains must be reported and paid during the comprehensive income tax filing period: May 1–31 of the following year. Unlike domestic Korean stocks, your brokerage does not file on your behalf. You must file yourself.
Filing via Hometax
- Go to Hometax (hometax.go.kr) → Tax Filing → Capital Gains Tax
- Select "Overseas Stocks"
- Enter your buy/sell transaction details (use your brokerage's transaction history report)
- Review the calculated tax and pay
Many brokerages now offer an "overseas stock capital gains calculation assistance" service that can help you compile the required figures.
Do I Still Need to File If My Gain Is Under 2.5M KRW?
Yes — in principle, if you had any overseas stock or ETF transactions during the year, you are required to file even if your tax liability is zero. Filing a return with zero tax is the safe approach.
Using ISA to Eliminate the Tax Entirely
If you hold Korean-listed U.S. ETFs (TIGER S&P500, ACE NASDAQ100, etc.) inside an ISA account, no capital gains tax applies. Gains inside the ISA are pooled with interest and dividends, with the first 2M KRW (general type) completely tax-free and amounts above that taxed at just 9.9%.
The limitation: ISA accounts cannot hold ETFs directly listed on U.S. exchanges. To hold SCHD in an ISA, use a Korean-listed equivalent such as SOL 미국배당다우존스 or ACE 미국배당다우존스. These track effectively the same index at similar costs.
Calculate Your Own Tax Bill
To enter your own buy price, sell price, exchange rates, and deduction to see exactly how much tax you owe, use the Capital Gains Tax calculator.
Open Capital Gains Tax Calculator →
To simulate long-term ETF DCA performance including dividend reinvestment, pair it with the Stock DCA calculator.
This article reflects Korean tax law as of 2026. Tax rates, deduction amounts, and filing requirements may change with government policy. For significant tax decisions, consult a licensed tax advisor or financial professional.