Korea's Securities Transaction Tax in 2026: 0.20% on KOSPI and KOSDAQ, and Why It Rose Again After the Financial Investment Income Tax Was Scrapped

What the securities transaction tax is

The securities transaction tax is charged on the sale amount when you sell shares. A fixed percentage applies to the whole amount sold, whether you made a profit or a loss, so if you buy at 10 million won and sell at 9 million, you still pay tax on 9 million. You do not file anything; it is deducted from your brokerage account when the trade settles. Because gains on listed Korean shares are untaxed for anyone who is not a major shareholder, this transaction tax is effectively the only tax cost of trading for ordinary investors, which is why the burden grows the more often you trade.

The 2026 rates

For sales from 1 January 2026, KOSPI shares carry 0.20%, made up of a 0.05% securities transaction tax plus a 0.15% special tax for rural development, while KOSDAQ shares carry 0.20% in transaction tax alone, without the rural special tax. KONEX is 0.10%, the K-OTC over-the-counter market matches KOSDAQ at 0.20%, and unlisted shares transferred off-exchange face the statutory base rate of 0.35%. The Act sets the base rate at 0.35% and lets the enforcement decree lower it for shares traded on securities markets, which is why rates differ by market and by year. The 2026 rates are in Article 5 of the Enforcement Decree as amended on 31 December 2025 (Presidential Decree No. 36001).

• KOSPI: 0.05% + 0.15% rural special tax = 0.20%
• KOSDAQ and K-OTC: 0.20%
• KONEX: 0.10%
• Off-exchange transfer of unlisted shares: 0.35%

How the rate has changed

Until May 2019 the tax was 0.30% for both KOSPI and KOSDAQ, and it was then lowered in steps: 0.23% in 2021–2022, 0.20% in 2023, 0.18% in 2024 and 0.15% in 2025, before rising back to 0.20% in 2026 (including the 0.15% rural special tax for KOSPI). In 2025 the KOSPI transaction tax itself was 0%, leaving only the rural special tax. KOSDAQ followed the same combined rates over the period. Because the rate depends on when you sold, check that year's rate when recalculating the cost of past trades or reading old backtest results.

• Until May 2019: 0.30%
• June 2019 to 2020: 0.25%
• 2021–2022: 0.23%
• 2023: 0.20% → 2024: 0.18% → 2025: 0.15%
• 2026: 0.20%

The financial investment income tax and the transaction tax

The steady cuts from 2021 were a schedule built on the assumption that a financial investment income tax would arrive. That tax would have taxed gains from shares, funds and the like above 50 million won a year. An Income Tax Act amendment in December 2020 set it to start in 2023, a December 2022 amendment pushed it to 2025, and a December 2024 amendment finally abolished it. With one half of the plan, taxing gains while trimming the transaction tax, gone, the government's 2025 tax reform proposal returned the transaction tax to its 2023 level. The stated reason for the 2026 decree amendment says the rates cut on the premise of the financial investment income tax are being restored because that tax was abolished.

Working out the cost

At a single sale, 0.20% looks small: selling 10 million won of shares costs 20,000 won. But it adds up quickly as trades multiply. Turning over 10 million won of capital in full once a week means about 50 sales a year, roughly 1 million won in transaction tax alone, or 10% of the capital. Add brokerage commissions and bid-ask spreads on every trade and the annual cost is higher still. By contrast, rebalancing once or twice a year costs about 0.2 to 0.4% of capital in transaction tax. This is why trading frequency can change the outcome of the same strategy so much; the guide on how frequent trading leaks money shows how to calculate total costs.

• One 10 million won sale: 20,000 won
• Turning over 10 million won every week: about 1 million won a year (10% of capital)
• Rebalancing once or twice a year: 0.2–0.4% of capital
• Commissions and spreads come on top

When the tax does not apply

Selling ETFs listed on Korean exchanges incurs no securities transaction tax, because an ETF is a share in a fund rather than a stock. So for the same index, trading an ETF is cheaper in transaction-tax terms than frequently trading individual stocks, although ETFs have their own annual fees and dividend income tax on distributions and gains. Selling foreign shares such as US stocks also incurs no Korean transaction tax; instead, gains above 2.5 million won a year face 22% capital gains tax, and a tiny US regulatory fee may apply. Major shareholders' trades in Korean shares face capital gains tax in addition to the transaction tax.

Checking with this site's tools

The Korean shares tab of the Stock Tax Calculator defaults to the 2026 transaction tax rate of 0.20% and shows the after-tax realised gain after commissions, and you can edit the rate to try other years. The Stock Strategy Backtester deducts 0.20% on every sale of Korean shares and uses 0 for Korean ETFs, so comparing a stock with an ETF on the same index shows how much the tax erodes results. Stock Paper Trading also defaults to a 0.20% Korean sell-side tax, with buttons for 0% and the 2025 rate of 0.15%.

Limits and disclaimer

The rates here are based on the Securities Transaction Tax Act, its Enforcement Decree and the Special Tax for Rural Development Act as of October 2026. Rates can change every year through a decree amendment alone, and proposals to change the system, such as easing the burden on loss-making investors, keep coming up. Check your broker's fee and tax information before trading. This guide explains the tax structure, does not recommend any trading approach, and is not tax or investment advice.