Se Iljun Proposes 'Public Interest Donation Property Seizure Prevention Act'... Preventing Recurrence of YS Case

Exterior view of Kim Young-sam Library located in Dongjak-gu, Seoul (Photo by Asia Economy DB)

[Asia Economy Reporter Geum Boryeong] Legislation to prevent seizure in the case of public interest donations without tax evasion intent is being promoted in the National Assembly. This is to prevent cases like the late former President Kim Young-sam, whose entire property was donated but was seized due to tax arrears.

On the 12th, Seo Il-jun, a member of the People Power Party, officially proposed the "Partial Amendment to the Inheritance Tax and Gift Tax Act."

The amendment imposes a notification obligation requiring the head of the competent tax office to notify in advance the post-assessment condition that gift tax will be imposed if the public interest corporation does not directly use the donated property within three years.

Under current law, property donated to a corporation for public interest purposes is not subject to gift tax. However, if it is not used directly for public interest projects within three years, gift tax is imposed. Most donors are unaware of this and only realize it after the three-year period has passed, resulting in situations where gift tax is imposed post-facto despite no intent of tax evasion.

The "Kim Young-sam Library" is a representative example. The late former President Kim Young-sam donated his entire property worth 6 billion KRW, including his residence in Sangdo-dong and land in Geoje Island, to society in 2010 to establish the Kim Young-sam Library. However, as construction was delayed by eight years beyond the scheduled completion date, the donated assets were not used for public interest purposes within three years. Initially, the Kim Young-sam Democratic Center was notified of a 3 billion KRW tax, but through adjustment procedures, a gift tax of 200 million KRW was imposed in March. When this was unpaid, authorities seized the ancestral gravesite in Geoje, causing controversy.

Rep. Seo said, "If there are parts that could shrink the donation culture, they must be amended to protect the noble will of the late former President Kim Young-sam, who aimed to create a place for democratic education and nurture future generations," adding, "We will do our best until the bill passes to ensure that public interest donations and social returns made with good intentions do not suffer disadvantages."

This content was produced with the assistance of AI translation services.