Following a setback in the South Korean government’s efforts to raise taxes against the middle-income class, the new tax code plan has angered those who inherit family business

New tax code angers long-lasting family firms

Lee Sang-deok, Jeon Jung-hong


Following a setback in the South Korean government’s efforts to raise taxes against the middle-income class, the new tax code plan has angered those who inherit family business. Earlier, the government said it will raise the threshold for inheritance tax reduction in case of family business succession from the current 200 billion won ($178.5 million) in sales to 300 billion won. The measure would benefit 400 companies. But the government also introduced a carryover of transfer tax years in the new tax code. Under this system, if children who inherit family business from their parents inevitably sell the inherited asset, they will have to pay a transfer tax calculated from the date of acquisition by parents, not by children. According to the finance ministry and Korea Federation of Small and Medium-sized Businesses on Wednesday, small companies requested the government to re-examine the calculation method. “Strict conditions, including a 10-year job security program, should be met in order to get tax deduction in family business succession, but the carryover system is too harsh for heirs because it is applied at any time when they sell the inherited asset after inheritance,” said Kang Sang-hoon, Chairman of Dongyang Foods.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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