Seoul: The government has announced a new temporary tax incentive aimed at encouraging retail investors to reinvest proceeds from overseas stock sales into domestic assets, the finance ministry revealed on Tuesday. This initiative is intended to bolster domestic investment by offering tax deductions on capital gains for those converting their overseas equity sales into the Korean won and committing to invest in local assets for at least one year.

According to Yonhap News Agency, the Ministry of Economy and Finance detailed that the current 20 percent tax on capital gains from overseas stock sales will be partially waived under the new scheme. The tax exemption is capped at 50 million won (approximately US$33,900) per person. The deductible amount will depend on the timing of the sale, with a full 100 percent deduction available for sales made in the first quarter of 2026, decreasing to 80 percent in the second quarter and 50 percent in the latter half of the year.

Additionally, the government is set to roll out a special tax benefit targeting retail investors engaged in currency-hedged products. A 5 percent deduction from overseas stock capital gains will be offered, with a maximum deduction cap of 5 million won per person. These measures are part of a broader strategy to introduce tax incentives and foreign-exchange measures designed to counteract net capital outflows and the resulting depreciation of the Korean won against the U.S. dollar.