Two "Portrait" (2007) pieces by Chinese artist Zeng Fanzhi / Courtesy of Ministry of Culture, Sports and Tourism

For the first time, Korea has accepted artworks considered to be of significant cultural value as a non-monetary payment for inheritance tax.

Four paintings — out of 10 originally submitted to the National Tax Service's Seocho District Office in Seoul this January — were approved by the Ministry of Culture, Sports and Tourism following a months-long appraisal by seven experts from the public and private sectors.

The approved pieces include two "Portrait" (2007) paintings by Zeng Fanzhi, who holds the auction record for one of the highest-priced works by a living Chinese artist; "Sunrise" (1991) by Lee Man-ik, the artistic director for the 1988 Seoul Olympics; and "Aggregation 08-JU072 BLUE" (2008) by Chun Kwang-young, who is renowned for his intricate, three-dimensional mulberry paper assemblages.

These will be added to the collection of the Museum of Modern and Contemporary Art, Korea (MMCA) and may feature in the institution's future exhibition programming, the ministry noted.

The news of Korea's first acceptance of artworks in lieu of inheritance taxes follows the January 2023 revision of the existing Inheritance Tax and Gift Tax Act.

Previously, only real estate and securities were recognized as acceptable in-kind payment options.

Under the new revision, beneficiaries can settle their inheritance tax by donating cultural artifacts or artworks, provided the tax due exceeds 20 million won ($14,800) and the amount owed is greater than the total value of the inherited financial assets.

The push for the so-called "art in lieu of tax" system first gained traction in 2020 when the Kansong Art Museum, the oldest private cultural institution in the country, auctioned two state-designated Buddhist treasures to alleviate its chronic financial woes, worsened by inheritance tax obligations.

A year later, the donation of the late Samsung Group Chairman Lee Kun-hee's historic 23,181-piece collection by his heirs to offset an $11 billion inheritance tax bill further fueled the discussion about art as a viable in-kind payment alternative.

Players within the art scene anticipate that the revised tax law can help enrich the domestic art sector by enhancing the collections of local public museums and preventing the outflow of significant, privately owned works to international markets.

Outside of Korea, countries like Britain and France have long accepted important cultural assets as a substitute for inheritance tax.

Notably, France, which introduced the system in 1968, established the Musée Picasso in Paris based on two donations made to the state through the "acceptance in lieu" scheme by Pablo Picasso's family.

Among the prominent beneficiaries of this scheme are the Tate and the National Gallery in London, as well as the Louvre and the Musée d'Orsay in France.