Tax Breaks Worth 1 Trillion Won... Public Golf Courses Outperform Membership Clubs in Profits

Expansion of Golf Course Profits, Not User Cost Relief
Average Operating Profit Margin for Public Courses at 36.9%
Tax Benefits as a Policy Tool for Popularizing Golf

The government is estimated to have provided tax benefits worth 1.148 trillion won to public golf courses last year as part of efforts to popularize golf. During the same period, public golf courses generated an operating profit of 972 billion won. This has prompted criticism that the support system, introduced to reduce user costs, has ultimately contributed to increased profits for golf courses. As the profitability of public golf courses receiving tax breaks significantly surpasses that of membership-based golf courses, controversy over the effectiveness of the policy is growing.

According to the Korea Leisure Industry Institute on June 18, users of public golf courses receive tax reductions totaling 18,600 won per person—12,000 won in individual consumption tax, 3,000 won in special rural development tax, and 3,600 won in education tax. Additional benefits arise from differences in value-added tax application. The institute estimates the total tax benefits provided to public golf courses last year amounted to 1.148 trillion won.

During the same period, 194 public golf companies (operating 198 courses) recorded total operating profits of 972 billion won. The average operating profit margin was 36.9%, 17 percentage points higher than the average for membership golf courses (19.9%). Even compared to the overall average operating profit margin for all golf courses (30.3%), public golf courses exceeded it by more than 6 percentage points.

Despite the partial easing of the golf boom following COVID-19, the profitability of public golf courses remains high. The institute analyzed that without the tax benefits, a considerable number of public golf courses would have posted losses. This indicates that tax reductions have had a significant impact on business performance.

The gap becomes even more pronounced when looking at individual courses. Golfzon County Jincheon recorded the highest operating profit margin at 57.8%. This was followed by Win Chest Golf Club (57.1%), Jungwon Golf Club (56.4%), Iksan Country Club (56.3%), and The Crosby Golf Club (56.0%).

Golfzon County Jincheon recorded the highest operating profit margin last year. Photo by Golfzon County Jincheon

Other high performers included Salt Bay (55.3%), Nam Yeoju (55.2%), Ezy Sky (54.7%), Golfzon County Sacheon (54.1%), and Golfzon County Gampo (54.1%). All of the top 10 courses had operating profit margins exceeding 50%. This level of profitability is considered exceptionally high, even when compared to most manufacturing and service industries.

In contrast, the highest operating profit margin among membership-based golf courses was only 41.8% at Seoseoul Country Club. Public golf courses that receive tax benefits are therefore generating higher profits than membership-based courses that do not. Some point out that the support policy, intended to popularize golf, has paradoxically strengthened the competitiveness of public golf courses.

Industry observers believe this profit structure is closely linked to the recent trend of membership-based golf courses converting to public courses. By converting to public status, courses can reduce their burden of individual consumption, rural development, and education taxes, while still maintaining relatively high user fees.

In fact, the number of membership-based golf courses switching to public status has been steadily increasing. Golfzon County Jincheon is also an example, having become a public course after acquiring a membership-based one. The industry analyzes that the prospect of enjoying both tax benefits and high profitability is a key factor driving this shift toward public golf courses.

Ultimately, the core of the controversy is who actually benefits from the tax support. The government aims to reduce usage fees so more people can enjoy golf, but there are persistent claims that the cost burden for users has not decreased as much as expected.

Last year, out of 46.41 million golf course users nationwide, 31.84 million—or 68.6%—used public golf courses. With nearly 7 out of 10 golf users choosing public courses, calls are growing to examine whether the tax benefits are genuinely translating into consumer benefits.

Seo Cheonbeom, head of the Korea Leisure Industry Institute, commented, "Tax benefits for public golf courses are a policy tool for popularizing golf," adding, "If the support effect is being absorbed more by business operators than by users, the intent of the system needs to be re-examined."

This content was produced with the assistance of AI translation services.