Pay Taxes According to Inheritance... Full-Scale Introduction of 'Inheritance Tax and Acquisition Tax' Begins

Efforts are accelerating to reform the inheritance tax system so that heirs pay inheritance tax based on the assets they individually inherit.

On the 24th, the Ministry of Economy and Finance announced that it held the 4th meeting of the expert task force on the introduction of an inheritance acquisition tax system (Inheritance Acquisition Tax Expert Task Force).

At this meeting, focused discussions were held on various deduction systems such as the spousal deduction discussed in the previous 3rd meeting, as well as simulations of key issues including adjustments to tax rates and taxable income brackets when introducing the inheritance acquisition tax.

The inheritance acquisition tax refers to a tax levied on the portion of the inheritance acquired by each individual heir, unlike the current inheritance tax system which imposes a tax on the entire estate. If the inheritance tax is converted to an inheritance acquisition tax, the tax burden related to inheritance will be reduced.

Among the 38 member countries of the Organisation for Economic Co-operation and Development (OECD), 23 countries have introduced inheritance taxes. Only four countries?Korea, the United States, the United Kingdom, and Denmark?adopt the estate tax method, while the remaining 19 countries use the inheritance acquisition tax method.

An official from the Ministry of Economy and Finance stated, "We plan to continue reviewing the transition to the inheritance acquisition tax through opinion gathering via research projects, expert task forces, and public hearings."