Year-End Tax-Saving Checkpoints
You made the same amount, yet someone pays tax and someone doesn't. What's the difference? Often the answer lies in "what you reviewed in December."
The Overseas Stock 2.5 Million Won Deduction Refills Every Year
Overseas stock transfer gains receive a basic deduction of up to 2.5 million won from the net gain of one year (January–December), with 22% attaching only to the excess. This 2.5 million won resets anew every January.
So this method is possible. Instead of selling a heavily-profitable stock all at once, if you realize gains to keep them near 2.5 million won within the year, you can make that year's capital gains tax zero.
Going a step further, if you sell part at year-end and the rest in the new year, you can use the 2.5 million won deduction separately across two years. This is the most basic principle of adjusting tax by "when you realize."
This is not an "unconditional gain" but a general principle from a tax standpoint. The market cannot be predicted, so deciding trade timing unreasonably based on taxes alone requires caution.
Gain-Loss Netting — Losing Stocks Have a Use "From a Tax Standpoint" Too
Within the same year, gaining and losing stocks are combined and taxed on the net gain (gain-loss netting).
For example, if you made 4 million won on stock A this year, the tax comes out as (4 million − 2.5 million) × 22%. But if stock B happens to be at a 1.5 million won loss, realizing it by selling lowers the net gain to 2.5 million won, making that year's capital gains tax zero.
The key is that "valuation losses" are useless and only "realized losses" are netted. Merely holding won't be reflected in the tax calculation. So the habit of reviewing losing stocks at year-end is needed.
Beware the Settlement Date — The Trap of Selling in Late December
The most frequently missed thing in year-end tax saving is the "settlement date."
Which year the tax is booked in is based on the "settlement date," not the "sale date." Overseas stocks take a few days to settle, so if you sell on the last day of December, settlement can slip into the new year and be booked as "next year's income."
That's why brokerages announce each year the "last trading day recognized as attributable to this year." If you want to finish the tax treatment within this year, you must be sure to check this final trading day and the settlement date and sell with room to spare.
The settlement cycle differs by country and brokerage. At year-end, be sure to check your brokerage's "final attributable trading day" notice.
Tax-Saving Accounts and Financial Income — The Year-End Wrap-Up Checklist
Finally, review the limits of the accounts that save tax within the year.
① ISA/pension account contribution limits: The ISA has an annual contribution limit and is tax-exempt on part of net gains, while pension savings/IRP give a tax credit on contributions. If you haven't filled the limit, you can consider filling it before year-end.
② The 20 million won financial income line: If interest + dividends combined exceed 20 million won, the rate can rise via comprehensive taxation. It's good to check at year-end how much financial income has accumulated this year.
③ Final gain-loss/deduction review: Combining the 2.5 million won deduction and gain-loss netting seen above, do a final tidying of this year's realized gains and losses. However, since concrete amounts and execution vary by individual situation, if the scale is large we recommend consulting a tax professional.
As of July 2026; limits and rates may be revised. For specific figures like ISA/pension limits, check the latest content in the related articles and National Tax Service materials.
Preguntas frecuentes
Q. Is selling losing stocks at year-end always a gain?
From a tax standpoint, you can reduce capital gains tax by netting them against that year's gains. But if you sell "to save tax" and that stock rises afterward, it can be a loss instead. Remember that tax is just one of many considerations, and market direction cannot be predicted.
Q. If I sell on December 31, is it booked as this year's tax?
Not necessarily. The attribution year is based on the "settlement date," so if you sell in late December, settlement can slip into the new year and become next year's income. That's why it's important to check the "final attributable trading day for this year" announced by the brokerage and sell with room to spare.
Q. For year-end tax saving, do I have to entrust it to a professional?
It's good to understand the basic principles (2.5 million won deduction, gain-loss netting, settlement date) yourself. But if amounts are large or several accounts and foreign dividends are entangled, the calculation gets complex, so in that case getting a tax professional's consultation is safe. This article explains general principles, not individual tax advice.
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