In this file photo, President Lee Jae Myung (R) listens to remarks by Samsung Electronics Co. Chairman Lee Jae-yong during his meeting with business leaders at the presidential office in Seoul on June 13, 2025. (Image courtesy of Yonhap)
SEOUL, Sept. 19 (Korea Bizwire) — South Korea’s biggest business families stand to see their dividend tax bills fall by more than 12 percent under the government’s new tax reform, which grants breaks to shareholders of companies classified as “high-dividend.”
According to a study released Wednesday by corporate research firm CEO Score, 87 out of 371 listed affiliates of the country’s major conglomerates met the high-dividend threshold in 2024.
That definition includes firms that maintained payouts year-on-year and either kept a payout ratio above 40 percent or raised dividends by at least 5 percent over the past three years.
The change will reduce the combined dividend tax burden for 758 members of controlling families by about 1.5 trillion won ($1.1 billion), cutting the effective tax rate from 48.4 percent to 42.5 percent.
President Lee Jae-myung (C, rear) attends a meeting with a group of business leaders at the presidential office in Seoul on June 13, 2025. Also at the meeting were LG Group Chairman Koo Kwang-mo (far L), Samsung Electronics Co. Chairman Lee Jae-yong (2nd from L), Hyundai Motor Group Executive Chairman Euisun Chung (2nd from R) and Lotte Group Chairman Shin Dong-bin. (Image courtesy of Yonhap)
Samsung heirs will benefit the most. Chairman Lee Jae-yong is expected to save roughly 26 billion won ($190 million), largely from holdings in Samsung Electronics, Samsung Life and Samsung Fire, which account for two-thirds of his dividend income.
His relatives — Hong Ra-hee, honorary director of the Leeum Museum, and Hotel Shilla CEO Lee Boo-jin — are projected to save 15.6 billion won and 13.6 billion won, respectively.
Hyundai Motor Honorary Chairman Chung Mong-koo could save 15.1 billion won, while his son, Chairman Chung Euisun, stands to benefit by 13 billion won. In contrast, SK Chairman Chey Tae-won, LG Chairman Koo Kwang-mo, Hanwha Chairman Kim Seung-youn and Shinsegae Vice Chairman Chung Yong-jin will see no savings, as their listed holdings did not qualify as high-dividend companies.
Samsung leads all chaebol with eight high-dividend affiliates, while Hanwha was the only one among the top 10 groups without any qualifying firms.
Officials say the reform is intended to encourage companies to raise shareholder payouts. Analysts expect the new tax treatment could prompt more conglomerates to boost dividends in the coming years.
Ashley Song (ashley@koreabizwire.com)
