Korea far exceeds OECD average in inheritance tax: report

0

Headquarters of the Organization for Economic Co-operation and Development in Paris (OECD)

SEJONG — South Korea has significantly exceeded the Organization for Economic Co-operation and Development average in the ratio of inheritance and gift tax revenue to gross domestic product, a local think tank said Friday.

In a report, the Korea Institute of Economic Research said Korea had a 0.5% ratio of inheritance and gift tax income to GDP, which placed the country third among OECD members in 2020.

Although the institute said the level was 0.3 percentage point higher, compared to the OECD average of 0.2%, it did not specify how many countries among the 38 members of the OECD it was compared.

KERI also said Korea’s top inheritance tax rate for children and grandchildren was about 25 percentage points higher than the OECD average – 50% versus 25%.

The maximum rate of inheritance tax reaches 60% for stock inheritances because additional fees are imposed, making it the highest level among members of the Paris-based organization, the institute said.

He also raised the possibility of double taxation, saying that previously income tax targets could also later become estate tax targets.

KERI argued that “the nation should ease the burden of inheritance tax, given the global trend that most OECD countries do not levy inheritance tax or apply inheritance tax rates. reduced taxation as long as the wealth is offered to direct descendants”.

He suggested a maximum inheritance tax rate of 30% as the optimal level.

Assuming that sufficient income tax has already been levied on descendants in the process of accumulating their wealth, many OECD members impose inheritance tax rates that are lower than inheritance tax rates. income tax, according to the KERI report.

By Kim Yon-se ([email protected])

Share.

About Author

Comments are closed.