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[THE INVESTOR] Many South Korean parents have given assets to their children riding on the country’s low effective gift tax rate, an opposition lawmaker said on Oct. 5.
In a report based on data by the National Tax Service, Rep. Park Kwang-on of the main opposition Minjoo Party of Korea said 26,227 South Korean minors under 19 years of age received a combined 3.05 trillion won (US$2.75 billion) in donated fortunes from their parents between 2011-15.
That translates to an average of 116 million won in gifted assets per minor.
The lawmaker attributed the large amount of assets donated to minors largely to South Korea‘s low gift taxes. The country’s nominal gift tax comes to 50 percent, but the effective tax rate stood at roughly 21 percent.
“The country’s effective gift tax rate is too low and only 47 percent of the donors pay taxes,” Rep. Park claimed. “Efforts should be made to raise the effective tax rate to a level to which the whole nation can agree.”
(theinvestor@heraldcorp.com)
In a report based on data by the National Tax Service, Rep. Park Kwang-on of the main opposition Minjoo Party of Korea said 26,227 South Korean minors under 19 years of age received a combined 3.05 trillion won (US$2.75 billion) in donated fortunes from their parents between 2011-15.
That translates to an average of 116 million won in gifted assets per minor.
The lawmaker attributed the large amount of assets donated to minors largely to South Korea‘s low gift taxes. The country’s nominal gift tax comes to 50 percent, but the effective tax rate stood at roughly 21 percent.
“The country’s effective gift tax rate is too low and only 47 percent of the donors pay taxes,” Rep. Park claimed. “Efforts should be made to raise the effective tax rate to a level to which the whole nation can agree.”
(theinvestor@heraldcorp.com)
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