Home » Samsung, the Lee family will pay 11 billion in inheritance tax

Samsung, the Lee family will pay 11 billion in inheritance tax

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The family of Lee Kun-hee, the former president of Samsung Electronics who died on October 25, announced that they will pay over 12 trillion won, nearly $ 11 billion, to the South Korean inheritance tax over five years. According to the OECD, that of Seoul is the highest in the world and cuts 60% of the hereditary axis. The figure, among the largest in the history of the country and in the world, “is three or four times the revenue collected in the sector by the Korean government last year,” said the Lee family. Around 23,000 pieces of art will be donated and works by Picasso, Chagall and Gauguin will end up at the National Museum of Modern and Contemporary Art.

The art collection at the National Museum of Korea

Among the pieces of art donated, there are 14 classified as “national treasures” and will be exhibited at the National Museum of Korea as part of Lee’s “passion for the art collection and his belief in the importance of transmitting the our cultural heritage to the new generations. As required by law, the family plans to pay the full amount of inheritance tax for a period of five years, starting from April 2021, ”the Lee family said in their statement.

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Lee, the man who was worth a fifth of the Korean GDP

Lee, who died on October 25 after a long illness at the age of 78, had transformed Samsung Group into the largest conglomerate in South Korea, a country of which now accounts for a fifth of GDP and 20% of exports. He took over the helm of the group in 1987 following the death of his father Lee Byung-chul, the founder. Seoul media reported that the family is likely to finance inheritance taxes with stock dividends, but could also get large bank loans. No details, however, were revealed on the divisions of the various types of shares owned by the patriarch, the richest man in South Korea with total assets of about 23.4 billion dollars.

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Samsung’s share package

Lee’s equity ownership includes 4.18% common stock and 0.08% preferred Samsung Electronics, 20.76% Samsung Life Insurance, 2.88% Samsung C&T and a 0.01 stake % in Samsung SDS. The shares ended the session on the Seoul Stock Exchange with a loss on the announcement of the Lee family who also decided to donate trillion won in health care and medical causes. Samsung is the largest “chaebol” in South Korea, the large family-owned conglomerates that have historically played an important role in the country’s economic development.

The debate on the power of the “chaebols”

Such groups, which include Hyundai Motor and SK, control vast networks of companies through a circular holding structure over which households often exert undue influence over investee companies. However, many citizens have called for reforms to limit the power of the chaebols over fears of crony capitalism and corruption. In January, Samsung’s heir Jay Y. Lee, 52, was sentenced to two and a half years in prison by a South Korean court for bribery of senior state officials, in a scandal that also involved the former president of the Republic Park Geun-ye, ended up under impeachment.

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