The National Tax Service announced on August 5 that it will inform 21,822 individuals about their eligibility and methods for filing preliminary reports for capital gains tax on stock transfers for the first half of the year. This number represents an increase of 6,171 individuals, or 39.4%, from the 15,651 notified in February.
Those required to file include major shareholders who transferred listed stocks from January to June, small shareholders who traded listed stocks over-the-counter, and shareholders who transferred unlisted stocks. However, small shareholders trading stocks of small and medium-sized enterprises on the Korea Over-the-Counter Market (K-OTC) are exempt.
Major shareholders are defined as those who meet the ownership percentage or market capitalization criteria as of the end of the previous business year. This includes those who acquired stocks after that date and meet the ownership requirements.
The ownership thresholds are set at 1% for KOSPI, 2% for KOSDAQ, and 4% for KONEX. Regardless of market classification, if the market capitalization of the stocks held exceeds 5 billion won, the individual is considered a major shareholder.
The major shareholder group is determined by aggregating the shareholdings of the shareholder, their relatives, and any corporations under their control. If not part of this group, only the individual's holdings are considered.
Filers must submit their reports electronically via Hometax or Smart Tax by the end of the month or file a paper report at their local tax office. If the tax amount exceeds 10 million won, it can be paid in installments over two months.
Foreign stocks are not subject to preliminary reporting and must be reported and paid during the final reporting period in May of the following year. If losses occur from foreign stock transactions while there are capital gains from domestic stocks during the same period, these must be consolidated in the final report.
Starting August 5, the National Tax Service will sequentially send mobile notifications through KakaoTalk, Naver app, KB Star Banking, Shinhan SOL Pay, and text messages. Those who have opted out of mobile notifications and taxpayers over 60 will receive a postal notification by August 11.
This year, the Hometax reporting interface will include a new section for guidance on carryover taxation for capital gains tax. If stocks received as a gift from a spouse or parents/children are sold within one year of acquisition, the acquisition price of the stocks must be reported as the price paid by the donor.
A pre-filling service will also be available, automatically entering details such as stock type, transfer date, number of shares transferred, and transfer price per share.
After the filing period, the National Tax Service plans to verify reports, focusing on omissions in major shareholder criteria, underreporting of tax rates, and low-priced transfers of unlisted stocks among related parties.
* This article has been translated by AI.
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