Samsung Family, opening a new era with full payment of 12 trillion won inheritance tax and social contribution

The heirs of Samsung paid the inheritance tax in full after filing for it in April 2021, and after a five-year installment payment process, they have fully paid the 12 trillion won inheritance tax generated from the estate of the late former chairman Lee Kun-hee. Along with the fact that it was an extremely large inheritance tax amount that is hard to find a precedent for in the country, and in addition to medical support and the return of cultural relics and artworks, attention has again been drawn to the way corporate wealth is giving back to society.

According to reports from the business community, this full payment of inheritance tax this time was carried out by Lee Jae-yong, Chairman of Samsung Electronics; Hong Rho-hee, honorary director of the Leeum Museum; Lee Boo-jin, president of Shilla Hotels; and Lee Seok-keun, president of Samsung C&T, among other heirs, after Lee Kun-hee passed away in October 2020. They completed the payments by utilizing the installment payment system (a method in which the tax is paid over multiple years), with a total of 6 installments made consecutively. The inheritance beneficiaries included shares and real estate of major related companies such as Samsung Electronics, Samsung Life, and Samsung C&T, bringing the total tax amount to 12 trillion won. This scale is about 50% higher than the country’s total inheritance tax revenue for 2024 (8.2 trillion won), so it is regarded as a symbolic case, showing how much impact a single inheritance case can have on national finances.

The significance of this process is not merely that it involved paying an enormous amount of tax. Because a large-scale inheritance tax means that part of the assets accumulated by the public are transferred into public funds through taxation. The business community believes that these public funds can indirectly contribute to welfare, healthcare, and the construction of social infrastructure. When filing the inheritance tax, the heirs said, “Paying taxes is a civic duty that citizens should fulfill,” which further reinforces the symbolic meaning of Korean representative business families fulfilling their tax obligations in accordance with law and principles.

The Samsung family’s contribution to society did not stop at paying taxes. In 2021, the heirs donated 7000 billion won to the National Cancer Center to support, among other things, the construction of the central infectious disease hospital; and they donated 3000 billion won to Seoul National University Hospital to support children with cancer and children with rare diseases. This is equivalent to channeling private funds into efforts to strengthen the government and public medical systems’ ability to respond to infectious diseases and to expand the treatment foundation for pediatric patients with severe illnesses. In particular, the central infectious disease hospital with 150 beds, planned to be completed in 2030 in Jung-gu, Seoul, will become a national hub responsible for the diagnosis and treatment, research, and education related to newly emerging and high-risk infectious diseases. It is said that the funding provided to Seoul National University Hospital in the past five years has also offered treatment and diagnosis opportunities for about 2.8 million children.

Its influence in the cultural field is also very significant. In 2021, the heirs donated more than 23,000 pieces of art and collectibles collected over the course of Lee Kun-hee’s lifetime to institutions including the National Museum of Korea, the National Museum of Modern and Contemporary Art, and local art museums. At the time, the market estimated the value of these works at as much as 10 trillion won. The so-called “Lee Kun-hee Collection” not only broadened opportunities for the public to enjoy culture, but also became a chance to enhance the competitiveness of Korean museums and art museums. Benefiting from effects such as touring exhibitions, the National Museum of Korea recorded about 6.5 million visitors last year, and overseas exhibitions will begin from the Smithsonian National Museum of Asian Art in Washington, D.C., continuing through to the Art Institute of Chicago, and also to the British Museum in London, UK, this coming October. It can be said that the return of cultural relics from the private sector has not stopped at expanding domestic cultural consumption, but has also become a channel for enhancing Korea’s cultural presence internationally.

Ultimately, the full payment of this inheritance tax has been interpreted as a case that combines fulfilling an ultra-large tax obligation with support for public healthcare and cultural arts. Its significance lies in the fact that it demonstrates how asset transfers by a corporate chairman’s family can be linked to discussions of social responsibility. In the future, this trend is very likely to have a considerable impact on the ways major companies and holders of large assets give back to society, as well as on the level of social expectations surrounding inheritance and public contributions.