New 0.05 pc transaction tax to be introduced for KOSPI trading in 2026
Seoul, Dec 1
The government will introduce a new 0.05 per cent transaction tax on KOSPI stock trades next year, the finance ministry here said on Monday, marking the first time the benchmark market will impose such a levy.
Under the revised tax law approved in July, the tax rate on KOSPI transactions will rise from zero percent to 0.05 percent, while the existing separate 0.15 percent agricultural and fishery village special tax will remain unchanged, reports Yonhap news agency.
Rates for the smaller KOSDAQ market and the K-OTC platform for unlisted firms will increase from 0.15 percent to 0.2 percent, according to the ministry.
The changed rates will take effect Jan. 1.
Meanwhile, South Korean stocks traded slightly lower late on Monday morning, trimming earlier gains, on profit-taking.
After opening higher, the benchmark Korea Composite Stock Price Index (KOSPI) went down 5.47 points, or 0.14 percent, to 3,921.12 as of 11:20 a.m.
On Friday (local time), Wall Street closed broadly higher, extending its winning streak to a fifth day amid the Thanksgiving holiday. The S&P 500 rose 0.54 percent, the Dow Jones Industrial Average gained 0.61 percent, and the tech-heavy Nasdaq composite climbed 0.65 percent.
In Seoul, large-cap shares were mixed.
Chip giant Samsung Electronics increased 0.6 percent, and rival SK hynix gained 0.57 percent. Leading battery maker LG Energy Solution went up 1.23 percent.
Bio shares were among gainers, with Samsung Biologics adding 3.11 percent and Celltrion going up 0.65 percent.
KB Financial Group, a major banking group, rose 0.88 percent.
The local currency was trading at 1,468.76 won against the U.S. dollar at 11:20 a.m., up 1.85 won from the previous session.
— IANS
Reader Comments
As an NRI with investments in both Indian and Korean markets, this is a bit disappointing. Every small tax eats into returns, especially for retail investors. The KOSPI had a good run, but such taxes can dampen sentiment. Let's see how the market absorbs it.
Governments everywhere are looking for revenue. From 0% to 0.05% is still low compared to many countries. In India, we also have GST on brokerage. The key is what they do with this money – if it improves market infrastructure and investor protection, it's worth it.
While I understand the need for taxation, introducing it during uncertain global economic times might not be the best timing. Retail investors are already cautious. Hope the Indian budget doesn't spring a surprise like this on us! Our markets are volatile enough.
The article says the tax is for "agricultural and fishery village special tax". That's a specific use case. If the revenue is directed towards rural development, it's a good policy. India could learn from such targeted taxation instead of blanket increases.
Respectfully, I think focusing on the tax is missing the bigger picture. Look at those gains in Samsung Biologics (3.11%) and LG Energy Solution. The Korean market has strong fundamentals in tech and batteries. A small tax won't change that long-term story.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.