As rich Koreans flee the country, KCCI urges inheritance tax reform to make them stay
Published: 03 Feb. 2026, 20:12
Updated: 10 Feb. 2026, 14:57
![The National Tax Service headquarters in Sejong is seen in this file photo [JOONGANG ILBO]](https://koreajoongangdaily.joins.com/data/photo/2026/02/10/f547f22f-cd1f-47b0-b591-10295c5e4cfd.jpg)
The National Tax Service headquarters in Sejong is seen in this file photo [JOONGANG ILBO]
The number of high-net-worth individuals leaving Korea doubled last year to 2,400, the fourth-highest in the world.
The reason? An inheritance tax burden exceeding 50 percent, apparently.
As more wealthy Koreans leave the country in search of tax havens, experts urge legislative reform to keep them in Korea.
Should the current inheritance tax system remain in place, inheritance tax revenue is projected to rise from 9.6 trillion won ($6.6 billion) in 2024 to 35.8 trillion won by 2072, according to data disclosed by the Korea Chamber of Commerce and Industry (KCCI) on Tuesday.
Inheritance tax burden increases
Korea’s inheritance tax system has remained fundamentally unchanged for decades, leading to a steady expansion of the tax burden, according to the KCCI.
In fact, the number of people subject to inheritance tax rose about 13-fold from 1,661 in 2002 to 21,193 in 2024. Over the same period, the share of inheritance tax revenue out of total tax revenue increased from 0.29 percent to 2.14 percent.
As a result, inheritance tax has shifted from being a levy borne only by ultra-wealthy individuals to one increasingly felt by the middle class, and Korea is now considered one of the countries with significant outflows of wealthy residents, the chamber said.
![A notice about capital gains taxes is seen posted on a wall outside a real estate dealership in Songpa District, southern Seoul on Feb. 3. [NEWS1]](https://koreajoongangdaily.joins.com/data/photo/2026/02/10/4fcc1b83-45de-4882-b5cb-6fc2cf5e3320.jpg)
A notice about capital gains taxes is seen posted on a wall outside a real estate dealership in Songpa District, southern Seoul on Feb. 3. [NEWS1]
The provisional net outflow of high-net-worth individuals from Korea surged from 1,200 in 2024 to 2,400 in 2025, according to Henley & Partners, a British immigration consultancy.
This figure ranks fourth globally, following Britain, China and India. The most preferred destinations for wealthy individuals leaving Korea were the United States and Canada.
‘Higher inheritance taxes lead to slower growth’
The chamber stressed that inheritance tax rates ranging from 50 percent to 60 percent could act as a major factor in accelerating capital flight overseas.
It also cited analysis of domestic data from 1970 to 2024 that showed a clear tendency for economic growth rates to decline as the ratio of inheritance tax revenue to GDP increased.
“Diversifying payment methods is a realistic alternative that can minimize reductions in tax revenue while facilitating corporate succession and reducing social side effects,” the chamber said.
Specifically, it proposed extending the general installment payment period for inheritance tax on ordinary assets from the current 10 years to 20 years or introducing a grace period of at least five years, while also allowing in-kind payment for listed shares.
![Lawmakers are seen during a meeting on amending laws related to inheritance tax at the National Assembly in Yeouido, western Seoul on Nov. 18, 2025. [NEWS1]](https://koreajoongangdaily.joins.com/data/photo/2026/02/10/1c440a46-479a-4972-a851-965947179d26.jpg)
Lawmakers are seen during a meeting on amending laws related to inheritance tax at the National Assembly in Yeouido, western Seoul on Nov. 18, 2025. [NEWS1]
The proposals also include expanding the stock valuation period from the current two months before and after the valuation date to two to three years before and after.
Under the current installment payment system, which applies when the inheritance tax payable exceeds 20 million won, small and medium-sized companies inheriting family businesses are allowed to pay in installments for up to 20 years or to defer payment for 10 years, followed by 10 years of installments.
In contrast, individuals and large corporations are permitted to pay in installments over 10 years, with no grace period.
“The current system functions as unreasonable discrimination against the general public and many companies,” the chamber said.
The KCCI also pointed out that the additional national tax refund charge, applied annually to outstanding installment balances, is excessive given the long payment period for inheritance tax, and called for a reduction in the surcharge rate, which stands at 3.1 percent this year.
In addition, the chamber proposed expanding in-kind payment of inheritance tax, currently allowed only for unlisted shares, to listed shares to ease cash flow burdens, and applying a long-term average stock price over two to three years instead of the current two-month average before and after the valuation date when assessing inherited shares.
Update, Jan. 10: The KCCI has since apologized after its press release came under fire as "fake news," with President Lee Jae Myung himself condemning it on social media. The KCCI report was accused of being released without sufficient fact checks and verification, and of inflating the number of wealthy Koreans who have relocated overseas. Critics have also noted that the Henley & Partners report, from which KCCI took the data, does not cite the inheritance tax as a reason for the outflow of wealthy Koreans.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY HAN YOUNG-HYE [[email protected]]
with the Korea JoongAng Daily
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