Large Bakeries' Tax Loopholes... President Lee Orders Comprehensive Review of Inheritance Tax System

Kang Yoo-jung, Blue House Spokesperson, Briefs on March 24
"Can a business operated for just 10 years truly be called a family business?"

President Lee Jae-myung has instructed a reform of the family business inheritance tax deduction system, citing cases where large bakeries have been used to avoid inheritance taxes.

Kang Yoo-jung, spokesperson for the Blue House, stated during a briefing on the 24th, "In a closed Cabinet meeting, President Lee once again raised the issue that some large bakeries are receiving tax reductions through loopholes during real estate inheritance processes," adding, "He questioned Commissioner Lim Gwang-hyun of the National Tax Service about the justification for reducing inheritance taxes in the context of family business succession."

President Lee Jae-myung is speaking at the Cabinet meeting held at the Blue House on the 24th. March 24, 2026 Yonhap News

President Lee also ordered Cabinet members to conduct a comprehensive review of the relevant system and to report back with their findings.

The family business inheritance tax deduction is a system designed to support the continued growth of small and medium-sized enterprises by providing inheritance tax benefits. To qualify, the business must have been operated for at least 10 years, with greater benefits granted for longer periods of operation.

Spokesperson Kang explained, "President Lee questioned whether a business that has only been run for about 10 years could truly be considered a family business," and added, "He asked if a family business shouldn't be defined as one that has been operated for 20 or 30 years, such that its closure would mean the end of that business's legacy."

Kang continued, "President Lee pointed out that these tax benefits are being misused, as some are attempting to reduce their taxes through improper family business succession," and mentioned, "He cited examples of family business succession involving certain large bakeries."

Meanwhile, during the same Cabinet meeting, Minister Han Sung-sook of the Ministry of SMEs and Startups proposed that, when making improvements to the system, it is necessary to conduct a thorough and detailed comparison between family business succession and corporate succession, according to Spokesperson Kang.

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