The Samsung family has fully paid 12 trillion won ($8.8 billion) in inheritance taxes on the estate of the late Chairman Lee Kun-hee within five years. This represents the largest inheritance tax payment in history and is about 50% greater than the 8.2 trillion won the government collected in total inheritance taxes in 2024. When filing the inheritance tax in 2021, the bereaved family stated that "paying taxes is a natural duty of citizens," pledging faithful payment in accordance with principles, and they kept that promise. Beyond fulfilling their tax obligations, the Samsung family has also practiced social contribution through the construction of a 1 trillion won infectious disease specialty hospital, support for pediatric cancer patients, and the donation of more than 23,000 artworks.
As the bereaved family stated, paying inheritance tax is a citizen's duty. However, the Samsung family's full payment of inheritance taxes provides an opportunity to review Korea's inheritance tax system as a whole and reform what needs to be fixed. First, the punitive inheritance tax rate, the highest level among Organization for Economic Cooperation and Development (OECD) countries, presents a serious problem. Korea's top inheritance tax rate stands at 50%, and when the surcharge on major shareholders is applied, the effective rate reaches 60%. As of 2024, the ratio of inheritance and gift taxes to gross domestic product (GDP) stood at 0.6%, six times the OECD average.
The outdated taxation framework for inheritance taxes must also be corrected. The current "estate tax" method, which applies progressive taxation based on the total inherited assets, has not been revised since its introduction in 1950. Although Korea's economic scale and the global corporate ecosystem have changed significantly over the years, unlike advanced economies abroad, Korea has failed to shed this outdated framework. Proposals to shift the inheritance tax base to an "inheritance acquisition tax," which levies taxes on each individual recipient of the estate, have been raised consistently but have been blocked by the "tax cuts for the rich" framing.
Due to the world's highest inheritance tax burden, many major shareholders of mid-sized and small companies have been driven to consider giving up on family business succession. Yet Korean companies are exposed to the threat of hostile mergers and acquisitions (M&As), lacking even management defense tools such as dual-class shares or poison pills that are widespread in advanced economies. Under these conditions, it is difficult to place companies at the forefront of overcoming the 1% range low growth that the Korean economy currently faces. Before it is too late, outdated tax systems that obstruct the sustainable growth and innovation of companies must be boldly reformed. To support the continued growth of companies, it is time to expedite the introduction of the inheritance acquisition tax and earnestly push forward measures such as lowering the top tax rate and abolishing the surcharge on major shareholders.
