"It's difficult for us to keep track of every stock trading by foreigners and the resulting changes in their proportion of owned shares. In many of the cases, we can't confirm the original purchasing price, so we cannot calculate the amount of capital gains tax," an official at a local securities company said on condition of anonymity.

An official at another securities firm said that the necessary technical infrastructure is not in place to enforce the withholding tax. "There aren't that many foreign investors who own more than 25 percent of shares in a company, but there are large numbers who own more than 5 percent," he said.

Officials also point out that 47 percent of shares registered with foreign owners are in the form of investments through stock funds, making it nearly impossible to trace the owners.

The finance ministry at the time of the announcement said the changed measure would affect only a limited number of foreign investors whose countries do not have tax agreements with South Korea. For nations that do have agreements with South Korea, the principle is for investors to be taxed in their country of residence, the ministry said.

"The new tax code is technically difficult to implement because we do not have a system," said Kim Young-whan, a researcher with KB Securities. "However, the new measure does not affect people from countries that South Korea has tax agreements with. It applies to only a handful of economies, like Hong Kong." (Yonhap)