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Samsung Group

Lee Kun-hee’s lavish art collection fuels debate on tax payment scheme

By Mar 04, 2021 (Gmt+09:00)

'Portrait of Dora Maar' by Pablo Picasso
'Portrait of Dora Maar' by Pablo Picasso

The late Samsung Chairman Lee Kun-hee’s lavish art collection is driving South Korea’s art circle to pressure lawmakers to amend the country’s tax system to allow in-kind tax payments from artwork – in a move to prevent the rare items from being sold overseas and instead keep them in the country as a part of its public cultural heritage. 

Eight former ministers of culture and 12 art organizations including the Korea Fine Arts Association, the Federation of Artistic and Cultural Organizations of Korea (FACO) and the Korean Museum Association (KMA) made a joint announcement on Mar. 3 calling for a systemic reform to the law that prohibits Samsung heirs from paying inheritance tax directly with artwork from Lee’s private collection.

“We ask the National Assembly to immediately amend in-kind tax payment laws. Relevant ministries including the Ministry of Culture, Sports and Tourism, the Ministry of Economy and Finance and the National Tax Service must also take follow-up action,” stated the announcement.   

The Samsung Group heirs are facing a record-high inheritance tax of 11 trillion won ($9.9 billion), which must be reported to the tax authorities and paid by Apr. 30 of this year. To secure funds for the payment, the group has been carrying out appraisals from the end of last year on pieces from Lee’s collection, estimated to be worth trillions of won, before selling them in the market.

Under the current law in South Korea, only real estate and securities can be used to pay tax in kind. The art community is concerned that Samsung will sell most of the artwork to overseas collectors, thereby losing a chance to keep the collection within South Korea to be enjoyed by the wider public at museums.

The art organizations pointed out that domestic collectors and institutions like the National Museum of Modern and Contemporary Art (MMCA) lack funds to purchase work from Lee’s collection.

MMCA’s annual art purchasing budget is 4.8 billion won ($4.3 million) – not enough to buy even a single Giacometti sculpture in the collection valued at more than 100 billion won ($88.9 million).

Lee's immense collection of Western art is at the center of the debate, as Samsung is most likely to donate its Korean antique collection to its own set of museums or to the National Museum of Korea; the current law prohibits overseas transfer of any domestic antique item more than 50 years from its production date.

The late Samsung Chairman Lee Kun-hee with wife Hong Ra-hee, philanthropist and director of Leeum, Samsung Museum of Art
The late Samsung Chairman Lee Kun-hee with wife Hong Ra-hee, philanthropist and director of Leeum, Samsung Museum of Art


EXTENT OF COLLECTION SURPRISES ART CIRCLE


Lee’s personal treasures delivered a pleasant surprise to both the domestic and international art community, as the sheer volume and value of the artwork  far exceeded expectations.

The late chairman’s 12,000 pieces of art include numerous government-designated national treasures as well as paintings of top Western artists such as Bacon, Chagall, Giacometti, Monet, Picasso and Rothko.    

Some of the artwork that grabbed attention from art critics and auctioneers include the "Bouquet" series by Chagall, “Portrait of Dora Maar” by Picasso and “Untitled” by Rothko.

'Le Bouquet des Mariés' by Marc Chagall
'Le Bouquet des Mariés' by Marc Chagall

Other notable pieces such as Bacon’s “Figure in a Room” and Giacometti’s “Tall Woman” have previous sales records at around 150 billion won ($133 million) and 160 billion won ($142 million), respectively. Samsung commented that they have been valued much higher at recent appraisal sessions.

'Untitled' by Mark Rothko
'Untitled' by Mark Rothko

According to one art expert who participated in the appraisal project: “These masterpieces put together in the same space will easily make one of the world’s top five art museums.”

CONFLICTING VIEWS 

The business circle is taking a more careful stance despite the art community’s unified voice for legislative intervention.

“While there might be such need to allow artwork as a means of tax payment, it would be highly inappropriate if the new system could force or obligate private companies like Samsung to donate its valuable collections to public institutions,” commented one industry representative.

The art community still sees Lee’s collection as a once-in-a-generation opportunity to allow more citizens to enjoy the art if displayed at public museums and also strengthen South Korea’s “cultural capital” at the international level.  

Samsung commented that finishing the appraisal process is the only priority for now.

Write to Su-young Jo at delinews@hankyung.com

Daniel Cho edited this article.

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