Published : Oct. 7, 2016 - 16:39
More than 97 percent of asset heirs in Korea were found to have been legally exempt from paying inheritance taxes, a lawmaker said Friday.
According to Rep. Park Kwang-on of the Minjoo Party of Korea, quoting the National Tax Service’s data, about 1.45 million people inherited a total of 151.6 trillion won ($136 billion) from their relatives between 2011 and 2015. Of them, only 2.2 percent actually paid taxes on their inheritance while others benefited from tax exemption.
Rep. Park Kwang-on of The Minjoo Party of Korea (Yonhap)
Under the current law, the inheritance tax increase rate is set in five brackets, with each levied a different tax rate. For example, a 10 percent inheritance tax is imposed on those with a tax base of under 100 million won, while 50 percent inheritance tax is levied on inheritance above 3 billion won, along with additional tax of 1.4 billion won.
Many tax payers, however, have been exempt from the inheritance tax, thanks to various allowances for spouses, number of children or family members aged 60 or older.
Many were also exempt from gift tax, Park added.
While about 1.2 million were presented about 163 trillion won, only 45.5 percent of them were asked to pay gift tax. The rest were eligible for tax benefits.
The lawmaker pointed out the necessity of revamping the inheritance and gift tax schemes.
“It is doubtful that whether only 2.2 percent of heirs and 45.5 percent of givers paying (inheritance and gift) taxes will be understood by the public,” said Park.
By Lee Hyun-jeong (rene@heraldcorp.com)