One of the many macabre rumors that South Koreans have told themselves about the powerful Samsung corporation is that the family dynasty artificially postponed the death of CEO Lee Kun-hee, who had been sitting in a hospital bed for years after a stroke, only because one wanted to avoid the horrific inheritance tax. The 78-year-old finally died in October – and the family has now issued a statement saying that all taxes would be paid out of “civil duty and responsibility”.
It was clear that the sum would be horrendous: The inheritance tax in South Korea is a unique 50 percent worldwide, with company shares it is often even higher. The payment announced last week is undoubtedly the largest in South Korean history: the richest manager in the country has to posthumously pay twelve trillion won, divided into six tranches. That is the equivalent of over nine billion euros. Lee’s total assets should be at least 22 billion euros.
South Korea is popularly known as the Samsung Republic. There are few countries in which a company is so closely linked to the rapid development of the state and which dominates its economy in such a way. Samsung not only manufactures smartphones and televisions in its home market, but also builds apartment complexes, takes out life insurance and dominates the entertainment industry. Samsung generates almost a fifth of South Korea’s gross domestic product.
To reduce the current tax burden, the Lee family donated 23,000 works of art from their private collection to museums. “Such a case has only rarely happened abroad,” writes the public broadcaster KBS. The collection includes works by Monet, Picasso and Dali, among others. In addition, the Lee family donated over 740 million euros to good causes in the health system.
Nevertheless, most South Koreans have a rather ambivalent relationship with the conglomerate. On the one hand, it embodies the newly won pride of the country, which worked its way up from a poor agricultural state to the twelfth largest economy after the Korean War. The Samsung smartphones are an expression of this success story: technologically leading, globally popular, spectacularly marketed. But on the other hand, the group also symbolizes the entrepreneurial greed of the South Korean elite, which in recent decades has repeatedly believed itself above the law: Lee Kun-hee also regularly landed negative headlines in the media for alleged tax evasion and the exploitation of workers. His son, 52-year-old Lee Jae-yong, is currently serving a 30-month prison sentence for bribing former South Korean President Park Geun-hye.