Korean Hospital Association urges reconsideration of tax deduction exclusion

The Korean Hospital Association (KHA) is urging the government to reconsider the exclusion of hospitals from the family business inheritance tax deduction program. The Ministry of Economy and Finance recently decided to exclude hospitals from the deduction, citing the need for equity with other licensed professions such as lawyers and accountants.

The KHA argues that this decision fails to reflect the economic reality and unique nature of the hospital industry. They emphasize that hospitals are not merely individual professional offices but complex organizations involving significant capital, facilities, and large numbers of staff, including nurses and medical technicians. The association points out that while professional offices may have fewer tangible assets, hospitals possess substantial land, buildings, and medical equipment, making them vulnerable to inheritance taxes as high as 50%.

Furthermore, the KHA notes that a significant portion of the hospital sector is privately owned. According to data from the Health Insurance Review and Assessment Service, privately owned institutions account for 57.4% of all hospital-level medical facilities and 75.9% of general hospitals. The association maintains that the policy goal of the deduction—to ensure the continuity of business operations, employment, and social functions—should apply to hospitals as well.