Seoul to revise rule on levying capital gains tax for majority stockholders

[Photo by MK DB]

South Korea will erase the system of adding stocks held by family and other members when majority shareholders are subject to pay capital gains tax 12 years after its enactment.

According to the finance ministry and the National Assembly on Sunday, the ruling and opposition parties decided to remove the system of adding shares held by family members, including spouses, parents and children, to categorize major stockholders. The change will go into effect next year. However, the government would keep the threshold for categorizing major shareholders to the current 1 billion won ($780,031) or 1 ~ 4 percent of the whole stake of a firm. The government initially proposed to raise the threshold to 10 billion won but abandoned the plan after discussions with the National Assembly.

The government will follow procedures to revise the Enactment Decree of the Income Tax Act so that the amendment will take effect next year.