Korean derivative capital gains tax starts with product classification
This worksheet organizes realized gains and losses from foreign futures, KOSPI 200 futures/options, CFDs and eligible index ELWs for Korean tax filing.
A futures or options label alone does not determine tax treatment: the trading market, underlying asset and contract terms matter.
Combining every profit and loss before checking classification can deduct a non-taxable loss or omit taxable income.
The calculation uses Republic of Korea rules for the 2026 income year and supports an individual Korean tax resident.
It classifies twelve product types, combines only taxable domestic and foreign derivative results in the same annual group, applies one KRW 2,500,000 deduction, and separates national and local tax.
A same-year additional realized-loss scenario is available.
The final estimate is withheld if residency, complete records or an unresolved product classification still needs confirmation.
Start from filing recordsObtain the broker’s derivative capital gains tax statement and KRW conversion details.
An account valuation change or net cash withdrawal is not necessarily taxable realized income.
Compare any tax reduction with the actual realized loss, transaction costs, settlement year and investment risk.
The worksheet supports reporting decisions and does not recommend a trade.
Twelve product categories and their boundaries
Income Tax Act Article 94(1)(5) and Enforcement Decree Article 159-2 define the derivative group.
The relevant representative equity-index definition also includes an index measuring that index’s volatility.
A domestic single-stock or non-index exchange contract must be distinguished from a contract on a foreign derivatives exchange.
For example, foreign exchange-traded commodity futures must not be entered as domestic non-index futures merely because both have a commodity underlying.
Korean 2026 derivative product classification and required checks| Product type | Worksheet treatment | Check |
|---|
| Korean representative equity-index futures/options | Taxable | Eligible KOSPI 200, KOSDAQ 150, mini and volatility-index exchange contracts |
| Korean single-stock futures/options | Outside derivative gains tax | Domestic-market contracts only; distinguish foreign exchange-traded contracts |
| Korean non-index exchange derivatives | Outside derivative gains tax | Domestic government-bond, currency, interest-rate and commodity contracts |
| Foreign derivatives-exchange contracts | Taxable | Includes foreign exchange-traded single-stock and commodity futures/options |
| Stock-underlying CFD | Taxable after conditions are confirmed | Eligible stock underlying plus cash difference settlement, no preset maturity and unilateral termination |
| Representative-index ETF/ETN-underlying CFD | Taxable after conditions are confirmed | Eligible index-tracking underlying and all CFD contract conditions |
| Representative equity-index ELW | Taxable | Eligible domestic security under Decree Article 159-2(1)(3) |
| Korean single-stock ELW | Outside derivative gains tax | Distinguish individual-stock from representative-index underlying |
| OTC equivalent of representative-index exchange derivative | Taxable after equivalence is confirmed | Verify equivalent economic substance using contract documents |
| Other or uncertain OTC derivative | Review required | The product name alone does not establish an exemption |
| Direct foreign-listed ETF holding | Outside this calculation | Includes leveraged ETFs; review the stock gains group separately |
| Direct ELS/DLS/ETN holding | Outside this calculation | Review its income classification separately; distinguish a CFD with that underlying |
Outside derivative gains tax means outside this particular Korean derivative capital gains tax group; it is not a blanket exemption from every tax or associated income category.
A mismatch between a domestic-only product type and the selected overseas market remains under review.
Direct ownership of a foreign-listed leveraged ETF belongs to a different product classification from trading its futures or a CFD.
Confirm CFD and OTC contract terms
CFD eligibility
Check that the underlying is eligible stock or an eligible representative-index-tracking ETF/ETN.
Also confirm cash settlement of the difference between opening and opposite transaction prices, no predetermined termination date, and termination by one party’s notice.
The underlying’s name alone does not confirm all the conditions.
Equivalent OTC products
The separate OTC category requires economic substance equivalent to an eligible representative-index exchange derivative.
Use contract documents and broker guidance to confirm that equivalence.
A general connection to an index does not establish it; use the uncertain OTC category when you cannot verify the terms.
The confirmation field records facts checked by the user.
It does not analyze contracts automatically or guarantee a legal classification.
Resolve an uncertain row with documentation rather than removing it to obtain a final total.
What the inputs mean
Realized amounts and fees
Enter profits as positive and losses as negative whole KRW amounts.
For a before-fee amount, enter the direct fee separately.
For an amount already reduced by fees, mark fees already included so the same fee is not deducted again.
Fees themselves must be nonnegative.
Residency and complete records
The supported scope is an individual Korean tax resident with 2026 transactions.
Confirm completeness only after collecting all relevant domestic and foreign accounts and brokers.
If residency changed during the year or records are incomplete, use only the clearly labeled confirmed-row subtotal while reviewing the full reporting scope.
Enter individual transactions or annual broker subtotals sharing the same product classification and conditions.
Split a subtotal that mixes taxable and non-taxable categories.
Up to 30 rows are supported; use a short note to identify the broker, account and classification evidence.
For foreign transactions, use filing-ready KRW amounts and verify the broker’s contract matching, first-in-first-out calculation and direct costs.
The worksheet does not reconstruct those source calculations.
Annual netting, deduction and tax formulas
Income Tax Act Article 102 separates derivatives from stock, real-estate and other income groups.
Only taxable derivative gains and losses of the same person and income year enter this total, including eligible domestic and foreign products.
Losses from non-taxable products or another income group are excluded.
The annual deduction applies once to this group, not once per broker, country or account.
Row net result = realized amount − separately deductible direct fee
Annual taxable derivative net N = sum of taxable row net results
Deduction used = min(max(N, 0), KRW 2,500,000)
Taxable base B = max(N − KRW 2,500,000, 0)
National tax = B × 10%; local tax = B × 1%; total = both taxes
A fee-inclusive row uses the entered realized amount directly.
Income Tax Act Article 104 and Decree Article 167-9 provide the reduced national rate of 10%; Local Tax Act Enforcement Decree Article 100(12) provides 1% of the taxable base for local tax.
Both taxes are calculated directly from the base, rather than calculating local tax from a rounded national amount.
Displayed estimates discard fractional KRW in each calculated tax and do not determine final return rounding, relief, penalties or foreign tax credits.
Step-by-step record reconciliation
- Collect 2026 derivative tax statements and KRW conversion records from every broker and check that the individual resident scope applies.
- Select market and product type, then enter the realized amount and fee. Check whether the statement’s amount already includes that fee.
- Confirm required CFD or OTC terms. Review the per-row taxable, non-taxable, outside-scope and unresolved results.
- Confirm complete records, then reconcile annual net income, the deduction, taxable base and national/local taxes.
- If useful, compare an additional same-year realized-loss scenario and verify its year attribution and costs before completing the filing records.
Sample amounts are fictional examples, not your account history.
When replacing a sample, change market, product, condition confirmations and fee treatment as well as the amounts.
A plausible confirmed-row subtotal is not a final annual estimate while unresolved rows or missing-record warnings remain.
Worked example: KRW 484,000 combined tax
Combine eligible profit and loss
Assume taxable foreign futures profit of KRW 10,000,000, another eligible derivative loss of KRW 3,000,000, and direct fees of KRW 100,000 not already deducted.
The annual taxable-group net is KRW 6,900,000.
Subtracting the KRW 2,500,000 deduction gives a KRW 4,400,000 base.
National tax is KRW 440,000 and local tax is KRW 44,000, giving KRW 484,000 in total.
Keep excluded losses separate
An additional KRW 5,000,000 domestic single-stock futures loss and KRW 9,000,000 direct foreign ETF loss do not change this derivative estimate.
The former is a non-taxable derivative category here; the latter belongs to the stock group.
A foreign derivatives-exchange commodity futures loss, by contrast, enters same-year taxable derivative netting.
At exactly KRW 2,500,000 of net income, the full amount is absorbed by the deduction and tax is zero.
A negative net result also gives zero tax but remains a deficit in a taxable product group.
Read the product classification together with the tax amount: they answer different questions.
Interpret the additional-loss scenario carefully
The scenario assumes an additional loss, not already included above, becomes a taxable realized derivative loss in the same 2026 income year.
Enter the positive magnitude of the loss and any additional direct fee, then confirm the market, product and required contract conditions.
Without confirmed same-year attribution, or for a non-taxable/outside-scope product, the scenario does not establish a reduction in annual tax.
Add KRW 2,000,000 of eligible loss and KRW 10,000 of fees
The original KRW 6,900,000 net becomes KRW 4,890,000 after subtracting KRW 2,010,000.
After the deduction, the base is KRW 2,390,000.
National tax of KRW 239,000 plus local tax of KRW 23,900 gives KRW 262,900.
The reduction from KRW 484,000 is KRW 221,100, alongside KRW 2,010,000 of additional realized loss and fees.
If net income is already within the deduction, additional loss creates no tax reduction in this model.
Excess losses are not automatically carried into another year.
A lower tax bill is not an economic profit: this worksheet does not model future returns, price changes or the full trading decision.
May filing and scope limits
Zero tax does not establish a filing exemption
Income Tax Act Article 105(1) excludes derivatives from preliminary filing, while Article 110 provides for the following-year final return.
The basic 2026-income filing period is 2027-05-01 to 2027-05-31.
Check official holiday and extension notices for the actual deadline.
Article 110(2) also applies the rule where there is no taxable base or a deficit, so retain your reporting records even when the estimate is zero.
- Nonresidents, residency changes during the year and corporate transactions are outside the supported scope.
- The worksheet does not automatically reconstruct contract-level first-in-first-out matching or exchange-rate conversions. Broker filing statements and supporting documents are the starting point.
- Penalties, relief, foreign tax credits, stock tax, ETF distributions and the separate taxation of direct ELS/DLS/ETN holdings require their own review.
- After national filing through Hometax, check individual local income tax filing/payment through the applicable local tax process, including Wetax. The combined estimate does not complete either return.
Results depend on user-confirmed facts and entered amounts.
For unusual structures or discrepancies with broker records, take the product terms, KRW conversion records and fee breakdown to the broker or a qualified tax adviser.
Frequently asked questions
Can foreign futures losses offset foreign stock gains?
No.
Income Tax Act Article 102 separates the stock and derivative income groups.
A stock loss does not reduce the derivative group here, and the derivative annual KRW 2,500,000 deduction is separate from the stock-group deduction.
Do two brokers give me two annual deductions?
No.
Aggregate the same individual’s taxable domestic and foreign derivative results across brokers and accounts for the same year, then apply one KRW 2,500,000 deduction.
Adding broker estimates that each used a full deduction can understate the annual liability.
Can a Korean single-stock futures loss reduce foreign futures profit?
The domestic single-stock futures/options category is outside derivative capital gains tax in this model, so its loss is excluded from the taxable total.
A single-stock futures contract traded on a foreign derivatives exchange has a different classification; verify the market first.
Is every product called a CFD automatically taxable?
Verify the eligible stock or representative-index-tracking ETF/ETN underlying and the cash difference settlement, no preset maturity and unilateral termination conditions.
If the terms or economic substance are uncertain, leave the row under review and ask the broker for its tax classification.
What if my reported realized amount already includes fees?
Enter that amount and mark fees already included.
The calculator then does not subtract the entered fee again.
Use a separate direct fee only for a before-fee amount, and do not repeat an expense recorded in another row.
Do unrealized losses or next-year losses reduce this year’s result?
Unrealized valuation losses do not enter the current result.
The scenario is calculated only when the additional loss belongs to the same 2026 taxable derivative year.
It does not import next-year losses or a prior-year deficit, and this model does not carry excess losses forward.
Does zero tax mean that I can skip filing?
Do not infer a filing exemption from zero estimated tax.
Income Tax Act Article 110(2) applies the final-return rule even when there is no taxable base or there is a deficit.
Check the actual taxable transactions and filing guidance, separately from a year with only non-taxable products.
When do I file, and what about local tax?
Derivatives use the following May final return without a preliminary return.
For 2026 income, the basic period is May 1–31, 2027; verify official holiday and extension notices.
Reconcile the national return and the separate individual local income tax filing/payment status.
Official sources and verification date
Verified on 2026-11-07 (Income Tax Act MST 280405; Income Tax Act Enforcement Decree MST 290841; Local Tax Act MST 282559; Local Tax Act Enforcement Decree MST 290815) against the current National Law Information OPEN API text.
The Income Tax Act current edition takes effect on 2026-07-01; the relevant cited provisions take effect on 2026-01-01.
The cited Income Tax Act and Local Tax Act Enforcement Decree editions take effect on 2026-10-01.
Recheck product scope, reduced rates, the deduction and filing notices before using a later income year.
Prepare the next filing step
Enter broker records above, resolve review rows first, and reconcile the annual derivative estimate.
For direct stock or ETF transactions, use the foreign stock capital gains calculator or major shareholder stock gains calculator to review the separate group.
Keep losses from the two groups separate as you prepare source records and confirm national and local tax filing/payment.