[Asia Economy Reporter Kang Juhee] As the multi-trillion won cultural assets and artworks left by the late Samsung Electronics Chairman Lee Kun-hee have come to light, attracting attention, the art community has appealed for the introduction of a 'payment in kind system' that allows inheritance tax to be paid with cultural assets and artworks.
Twelve organizations including the Korea Federation of Arts and Culture Organizations and eight former ministers, including former Minister of Culture, Sports and Tourism Park Yang-woo, issued a public appeal on the 3rd titled "We Urgently Appeal for the Institutionalization and Active Participation of the Payment in Kind System for Cultural Assets and Artworks in Inheritance Tax!"
The payment in kind system refers to a system that allows taxes such as property tax and inheritance tax to be paid with artworks and cultural assets. Under the current Gift Tax and Inheritance Tax Act, only securities excluding real estate and stocks are recognized as eligible for payment in kind, but the art community argues that artworks and cultural assets should also be included.
They explained, "Many valuable cultural assets and outstanding artworks preserved through the passion and sacrifice of collectors are frequently hastily disposed of during the inheritance process without their proper value being recognized," adding, "There are even regrettable cases where precious Korean cultural heritage and artworks end up in the hands of overseas collectors and are not kept domestically but scattered here and there."
They continued, "The only way to overcome these difficulties is the introduction of the payment in kind system for inheritance tax, which is currently implemented in major foreign countries," emphasizing, "We earnestly hope that the introduction of the payment in kind system, which can properly preserve and utilize valuable cultural heritage and high-quality artworks, will provide an opportunity for our culture to mature to the next level."
The reason the discussion on the introduction of the payment in kind system suddenly gained prominence is due to the focus on Chairman Lee’s collection. According to the art community, the market appraisal of the artworks owned by the late chairman has been underway since the end of last year.
The scale of the collection left by Chairman Lee is estimated to be about 12,000 pieces, with an appraisal value estimated to reach a staggering 2 to 3 trillion won. The collection encompasses Korean antiques, modern and contemporary Korean artworks, and Western modern and contemporary artworks, with about 900 major works by masters such as Pablo Picasso, Monet, and Andy Warhol among the Western artworks.
Meanwhile, according to the Ministry of Economy and Finance, the government is currently reviewing the art community’s proposal for the introduction of the payment in kind system.
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