Giant bakery cafes are popping up. Tax officials see a tax motive

Recently, large bakery cafes have been on the rise in South Korea, with tax authorities warning that this phenomenon may be motivated by inheritance tax benefits. These cafes, located along the Han River, have become more than just coffee shops; they are attracting family customers with their spacious environments and beautiful views.

According to the National Tax Service, large cafes are defined as establishments that span at least 333 square meters, and the number of such cafes has more than tripled in the past five years. Notably, 'Positive Space 566' in Gimpo has been recognized by Guinness World Records as the largest cafe in the world, boasting 2,190 seats.

However, the rise of these giant cafes has raised concerns related to the inheritance tax system. Under current law, heirs can receive a tax deduction of up to 30 billion won if they inherit a small or midsized family business that has been operated for at least 10 years. There are worries that some wealthy owners are using large cafes as a means to evade taxes. In response, the government plans to tighten regulations through a tax reform package.