The family of the late head of Samsung Electronics announced Wednesday that it is paying a massive inheritance tax bill worth more than 12 trillion won (about $ 10.78 billion).
South Korea has one of the highest inheritance tax rates in the world, at 50 percent, and the second-highest in the world after Japan.
The tax issue has been closely watched from investors as it may affect the family’s stake in Samsung.
Lee Kun-hee’s family said in a statement: The inheritance tax payment is one of the largest in South Korean history and globally, and was equivalent to four times the total property tax revenue of the Korean government last year.
The family added: As required by law, the family plans to pay the full amount of inheritance tax – which represents more than half of the late president’s total property value – over a period of five years, starting in April 2021.
Lee Kun-hee passed away in October 2020 at the age of 78, after developing the Samsung Group into the largest conglomerate in South Korea, and assuming leadership in 1987 after the death of his father, Lee Byung-chul, who founded the group.
Yonhap said the family was likely to finance inheritance taxes through dividends and may also obtain bank loans, and the family did not disclose how the family members divided the father’s shares.
And thementioned Reuters reported in October that Lee Kun-hee was the richest stock owner in South Korea, with assets valued at $ 23.4 billion.
It includes 4.18 percent in Samsung Common Electronics, 0.08 percent in Preferred Shares, 20.76 percent in Samsung Life Insurance, 2.88 percent in Samsung C&T, and 0.01 percent in Samsung SDS.
The family also said it is donating a trillion won for healthcare and medical causes, as well as donating its collection of artifacts and paintings – nearly 23,000 items – to the National Museum of Korea and other cultural organizations.
Samsung is the largest chaebol in South Korea – or large family-run conglomerates that have historically played an important role in the country’s economic development.
These companies, which include Hyundai Motor Group and SK Group, control vast networks of companies through a circular contract structure and their control typically exceeds cash flow rights.
This means that families often exert undue influence in group companies despite their relatively small direct stakes.
In January, a South Korean court sentenced Samsung’s heir, Jay Y. Lee, to two and a half years in prison.