Qualifying venture stock option exercise gain may be exempt up to KRW 200 million a year and KRW 500 million per company, with separate installment or deferral rules.
Income-tax exemption
For qualifying grants made by December 31, 2027, the cited special taxation rule can exempt exercise gain up to KRW 200 million in a year and KRW 500 million cumulatively per venture company. The referenced limits apply to exercises from January 2023.
Example
An exercise price of KRW 10,000, market value of KRW 40,000 and 10,000 shares produces KRW 300 million exercise gain. If no limit has been used, KRW 200 million can be exempt under the annual cap and KRW 100 million remains taxable, subject to all qualifying conditions.
Five-year tax payment arrangement
A qualifying employee may apply to pay tax related to exercise gain over five years under the cited special provision. The first fifth is handled with the exercise-year return and the balance over the following four years under the statutory procedure.
Deferral until sale
A separate qualifying election can defer tax at exercise so that tax is addressed when the shares are sold. The eligibility and election requirements are detailed; confirm with the company and a tax adviser before exercising.