Samsung boss Lee Kun-hee announced that it will pay $10.8 billion in inheritance tax. This will be the largest tax payment in South Korea and even the world.
The value of this inheritance tax is said to be equivalent to three to four times the total property tax income of the Korean government last year.
“As stipulated in the law, the family plans to pay the full inheritance tax for five years starting April 2021. It is our civil duty and responsibility to pay all taxes, “said the family quoted from CNBC, Friday (30/4/2021).
Lee Kun Hee died on October 25, 2020. He is known as the figure behind the successful transformation of Samsung into an electronics giant. His fortune is estimated at US $ 23.4 billion, which also includes stakes in Samsung and affiliated companies of $17 billion.
South Korea Implements a High Heritage Tax System
South Korea is indeed one of the countries that applies a high inheritance tax. When a person dies, the government will impose a tax of 50% if leaving behind a wealth of more than 3 billion Won and limit the amount of assets to be transferred to the next generation.
According to local media reports, Lee Kun-hee has a 4.18% stake in Samsung Electronics plus 0.08% preference shares. He is also said to have controlled 20.76% shares in Samsung Life Insurance Co Ltd, 2.88% shares in Samsung C&T, and 0.01% shares in Samsung SDS Co Ltd.
There is no information on how the deceased’s family paid the tax. A source at Reuters said there had been discussions about using shares in affiliated companies as collateral for obtaining loans.
As a form of anticipation, they contributed 1 trillion won. The money is used to improve public health care and half of the amount for the construction of the first infectious disease hospital in the country of Ginseng.
A source at the Financial Times said there would be no difficulties for the Lee Kun-hee family to pay taxes. This could be from increasing Samsung’s dividend payments, taking out a bank loan or selling some shares in a small company.
“There is no major difficulty paying tax bills in installments. They can increase Samsung’s dividend payments, take bank loans with their shareholdings as collateral and sell some of the stakes in small companies, which will not affect their grip on the main business unit,” he said.
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