South Korea's Corporate Succession Crisis: KCCI Proposes Bold Inheritance Tax Reforms

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Economy

By James Carter 11 Apr, 2025

South Korea's Inheritance Tax Challenge

On April 10, the Korea Chamber of Commerce and Industry (KCCI) unveiled a groundbreaking proposal to transform the country's inheritance tax system, aiming to ease the financial burden on corporate successions.

South Korea's notoriously high inheritance tax rate stands at 50%, coupled with a premium valuation for major shareholders at 20%.

Proposed Reforms

The KCCI suggests staggering tax payments, with a 30% inheritance tax upon death and a 20% capital gains tax upon share sale. This approach supports business continuity by deferring tax obligations.

Global Context

With countries like the UAE and Singapore attracting wealthy individuals, South Korea faces a net outflow of high-net-worth individuals. The KCCI's proposals aim to reverse this trend by fostering a favorable environment for corporate succession.

Looking Ahead

As South Korea debates these reforms, the balance between wealth redistribution and economic growth remains a pivotal issue for policymakers.