The number of investors who reported capital gains tax on profits from overseas stock investments surged more than 2.5 times, topping 500,000.

Data submitted by the National Tax Service to Park Seong-hoon (박성훈), a ruling People Power Party lawmaker on the National Assembly’s Finance and Economy Planning Committee, showed 523,709 people reported capital gains tax on overseas stocks for income earned in 2024.

That was up 152.7 percent from a year earlier, marking the first time the figure exceeded 500,000. The jump is analysed as being influenced by a rally in the U.S. stock market in 2024.

In that year, the Standard & Poor's (S&P) index gained 23.3 percent and the Nasdaq rose 28.6 percent. Over the same period, the KOSPI fell 9.6 percent and the Kosdaq dropped 21.7 percent.

These are investors who reported capital gains tax because their gains from selling overseas stocks exceeded 2.5 million won. A basic deduction of up to 2.5 million won applies each year to capital gains from overseas stocks. Investors must pay a 22 percent tax on gains remaining after the deduction.

Overseas stock investing has also been influenced by its establishment as a common personal finance method since the COVID-19 pandemic.

The number of overseas stock capital gains tax filers rose from 139,909 in 2020, when the pandemic was spreading, to 242,862 in 2021. It then shrank to 100,374 in 2022 amid a market downturn, before returning to the 200,000 range in 2023 at 207,231.

Compared with 2020, the figure has risen 3.7 times in four years. Profitability also improved. Total capital gains reported by these investors for 2024 were tallied at 14.4212 trillion won. That was up 303.1 percent from a year earlier at 3.5772 trillion won.

Average capital gains per filer, calculated by dividing total gains by the number of filers, were about 28 million won.

Average capital gains per person rose from 21 million won in 2020 to 28 million won in 2021, then fell to 11 million won in 2022. It rose to 17 million won in 2023, then increased by more than 10 million won last year.

Retail investors in overseas stocks are estimated to have continued expanding their overseas market investments last year despite a weak won.

According to the Korea Securities Depository, the value of U.S. stock holdings in custody rose from about $44.2 billion in 2022 to $68.0 billion in 2023 and surged to $112.1 billion in 2024. It was tallied at $163.6 billion at the end of last year, higher still.

Park said, "The government is applying 'patchwork prescriptions' as part of exchange-rate defence measures to bring retail overseas investors back to the domestic market, but it is only a stopgap." He added, "Rather than blaming a sharp rise in the exchange rate on retail overseas investors and companies, it is urgent to overhaul regulations and shift to economic policies that expand the ladder for corporate growth."