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S. Korea's large shareholders reap huge capital gains

All Headlines 09:34 October 12, 2016

SEJONG, Oct. 12 (Yonhap) -- Large shareholders of listed South Korean companies have reaped huge capital gains over the past five years amid retail investors' losses from stock investments, a lawmaker said Wednesday.

In an analysis of data from the National Tax Service, Rep. Park Kwang-on of the main opposition Minjoo Party of Korea said 166,838 people filed their capital gains tax return between 2011 and 2015, with their proceeds from stock sales reaching a combined 48.2 trillion won (US$42.8 billion).

Of the total, 610 shareholders reported capital gains of 10 billion won or more, with 132,166 people filing capital gains of less than 100 million won.

A total of 28 shareholders reported capital gains exceeding the 100 billion-won mark, according to the data.

Capital gains taxes are imposed on those who sell 1 percent or more of shares listed on the main stock market, and 2 percent or more of stocks traded on the secondary bourse. Sellers of unlisted stocks are required to pay capital gains taxes regardless of the volume.

Large shareholders' large capital gains strike a sharp contrast to big losses South Korean retail investors have been suffering from their stock investments.

According to market watchers, retail investors posted an average investment return of minus 11.32 percent for their top 20 net-buy issues traded on the main stock market between June 27 and Sept. 9 this year.

"The concentration of capital gains in large shareholders gives a snapshot of how the country's polarization is deepening," the lawmaker said. "There is a need to ensure fair taxation on people's incomes other than earned income."

S. Korea's large shareholders reap huge capital gains - 1

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