Germany-South Korea Cross-Border Inheritance Tax
Last updated: 3 Oct 2025
Germany × South Korea: Inheritance & Gift Tax — No Treaty
Germany and South Korea have no bilateral inheritance/gift tax treaty. Double-tax mitigation relies on Germany’s § 21 ErbStG (credit for foreign death duties on foreign-situs assets) and Korea’s national Inheritance & Gift Tax Act. Korea levies progressive IHT up to 50% (up to 60% for certain controlling shareholdings); the statutory basic deduction is 200 million KRW. Policy changes are proposed for 2028 (recipient-based system), pending the National Assembly.
BMF lists Germany’s IHT treaties (e.g., US, CH, FR, DK, SE, GR) — South Korea is not among them. Korean law and guidance confirm national IHT and gift tax rules, incl. a 200 m KRW basic deduction; KR rates reach 50% (60% for large shareholders). Proposed KR reform (recipient-based) targets implementation in 2028, pending legislative approval. :contentReference[oaicite:0]{index=0}
At a glance
No DE–KR IHT treaty
- Credits via Germany’s § 21 ErbStG (foreign-situs assets) and administrative practice in KR.
- Income/capital DBAs exist but do not govern inheritance/gift tax.
Why it matters
- KR levies high IHT (to 50–60%); DE taxes worldwide if decedent or heir is an Inländer.
- Saubere Situs-Zuordnung & Belegkette bestimmen die Anrechnungshöhe.
What taxes can bite?
| Country | Tax & trigger | Scope highlights |
|---|---|---|
| Germany | Erbschaft-/Schenkungsteuer (beneficiary-based) | Worldwide scope if decedent or heir is German resident (Inländer); otherwise German-situs assets. Credit under § 21 ErbStG for foreign-situs assets. |
| South Korea | Inheritance & Gift Tax (national, estate-style with deductions) | Progressive up to 50% (effectively up to 60% for controlling shareholdings). Basic deduction 200 m KRW per law; additional deductions depend on status. Reforms proposed for 2028 (recipient-based). |
See the Korean statute translation and press for rate/deduction context; DE credit rules in § 21 ErbStG. :contentReference[oaicite:1]{index=1}
Relief in practice: § 21 ErbStG & Korean rules
- Germany (§ 21 ErbStG): Anrechnung der ausländischen ErbSt auf Auslandsvermögen, objektbezogen und staatenweise; die deutsche Steuer für das Auslandsobjekt muss innerhalb von 5 Jahren entstehen. Nachweise über ausländische Festsetzung & Zahlung sind erforderlich. :contentReference[oaicite:2]{index=2}
- South Korea: Nationale IHT ohne spezielles DE-Abkommen; Doppelbelastung wird über KR-Bemessung/Deduktionslogik & Zahlungsmodalitäten administrativ adressiert; saubere situs-Belege/Valuationen sind entscheidend. (Beachte: geplante Systemwechsel 2028.) :contentReference[oaicite:3]{index=3}
Situs drivers (high level)
| Asset | Situs (typical) | Comments |
|---|---|---|
| Immovable property | Where located | Primäre Steuerhoheit meist am Belegenheitsort. |
| Tangible movables | Physical location at death/transfer | Inventar & Belege zum Stichtag. |
| Bank claims / deposits | Debtor location (bank) | Bankdomizil nachweisen. |
| Shares / stock | Place of incorporation | DE GmbH → DE-Situs; KR Co., Ltd. (주식회사) → KR-Situs. |
Korea: rates & deductions (high level)
| Item | Rule | Source |
|---|---|---|
| Top rate | 50% (up to 60% für kontrollierende Aktionäre) | News / practice summaries. :contentReference[oaicite:4]{index=4} |
| Basic deduction | KRW 200,000,000 (resident or non-resident decedent) | Statutory text (EN). :contentReference[oaicite:5]{index=5} |
| System reform | Planned shift to recipient-based IHT (target 2028, pending) | Reuters/Korea Herald. :contentReference[oaicite:6]{index=6} |
Worked example (illustrative)
- Decedent: German resident (Inländer) at death.
- Heir: Adult child resident in Seoul.
- Assets:
- KR-situs listed shares: KRW 1.2 bn
- DE bank deposit: €300,000
- Assumptions (illustrative only): Ignore debts/reliefs beyond KR basic deduction and DE allowances; FX parity not assumed.
Korea: Kein Abkommen; administrative Entlastung richtet sich nach nationalem Recht/Verfahrenspraxis.
Education only. Ergebnisse hängen von Freibeträgen, Bewertungen, Beteiligungsquoten (Kontrollzuschläge), FX und fristgerechten Anträgen ab.
Planning checklist (no legal/tax advice)
- Situs-Mapping (DE vs. KR) pro Asset; besondere Regeln für controlling shares beachten.
- Credits modellieren: § 21 ErbStG objekt-/staatenbezogen; Frist 5 Jahre; Nachweise & Zahlungsbelege vorbereiten.
- Reform-Watch (KR): mögliche Umstellung 2028 (recipient-based) kann die Verteilungslogik ändern.
- Sequencing Gifts vs. Bequest; prüfen, wie KR-Gifts und DE-SchenkSt in Aggregation wirken.
- File hygiene: Bewertungen zum Todestag, Sitz/Belege der Schuldner, Registerauszüge, Bankdomizil, Apostille/Übersetzungen.
FAQ
Is there a Germany–Korea inheritance/gift tax treaty?
No. Germany’s IHT treaties cover a handful of countries (e.g., US, CH, FR, DK, SE, GR) — Korea is not listed. Relief is via § 21 ErbStG and Korean domestic rules. :contentReference[oaicite:7]{index=7}
What is Korea’s basic inheritance deduction?
KRW 200 million per statute (applies whether the decedent is resident or non-resident). Additional deductions depend on facts. :contentReference[oaicite:8]{index=8}
How high can Korean inheritance tax go?
Top rate 50% (effectively up to 60% on some controlling shareholdings), per court practice/news coverage. :contentReference[oaicite:9]{index=9}
Talk to us
We build side-by-side DE × KR models (asset-level, credits, timing) and prepare credit-ready files under § 21 ErbStG.