How Much Tax on Luxury Watches Received by Osanguk and Oyejin? [Paris Olympics]

"There are two things in life that are inevitable: death and taxes."

Benjamin Franklin, one of the founding fathers of the United States, cited taxes as one of the two things in life that can never be avoided. Representing Korea at the Olympics, Osangwook and Oyejin are expected to receive luxury watches worth over 10 million won as gifts. These are prizes awarded to the first gold medalists. Occasionally, large events hold raffles with expensive prizes such as cars or TVs. The problem is that the condition is 'taxes and public charges to be borne by the recipient.' If you receive a prize worth tens of millions of won, you have to pay hundreds of thousands of won in taxes. What about these two athletes? Ultimately, Osangwook (27) and Oyejin (19), the first male and female gold medalists at the 2024 Paris Olympics, are expected to receive Omega luxury watches worth over 10 million won without any tax burden.

The Swiss watch brand 'Omega' previously promised, "We will gift the 'Paris Olympics Edition Watch' to the first male and female South Korean athletes who win gold medals in individual events at the Paris Olympics." Omega, the official timekeeper of the Olympics (a sponsor company that measures game records at sports events), has been gifting Omega watches to the first gold medalists since the 2012 London Summer Olympics. At the 2012 London Olympics, shooting representative Jin Jong-oh was the first to receive the watch, attracting attention. At the 2014 Sochi Winter Olympics, speed skater Lee Sang-hwa was the recipient, while at the 2016 Rio de Janeiro Games, the men's archery team received the watches. At the 2022 Beijing Winter Olympics, short track representatives Hwang Dae-heon and Choi Min-jung received Omega watches.

Paris Olympic Edition 'Seamaster Diver 300M' (left) and 'Speedmaster Chronoscope'. [Image source= Omega]

At the 2024 Paris Olympics, fencer Osangwook and shooter Oyejin became the owners of Omega watches. On the first day of the competition, the 27th, Osangwook defeated Tunisia's Fares Ferjani 15-11 in the men's sabre individual final held at the Paris Grand Palais, securing the first gold medal for the Korean delegation. The next day, Oyejin pushed senior teammate Kim Yeji to second place in the women's 10m air pistol final, becoming the first female gold medalist for the Korean team.

Osangwook and Oyejin can choose to receive either the Omega 'Speedmaster Chronoscope' or the 'Seamaster Diver 300M.' The prices of the two watches are 14.2 million won and 12.9 million won, respectively. Both watches have the Olympic emblem and the inscription 'PARIS 2024' embossed on the back. How much tax would Osangwook and Oyejin have to pay if they received the Omega watches free of charge?

Park Jong-won, an accountant at Woo Young Accounting Firm, explained, "Since the watches are received free of charge, it can be considered a gift, or if viewed as a kind of prize, it can be classified as miscellaneous income. From a tax-saving perspective, it is much more advantageous to report it as a gift tax." If reported as a gift tax, since the gift amount is under 100 million won, 10% of that amount must be paid as tax. In other words, if receiving the Speedmaster Chronoscope, 1.42 million won must be paid. On the other hand, if the watch is classified as miscellaneous income, a 22% tax rate applies, meaning about 3.12 million won must be paid.

However, Osangwook and Oyejin likely do not need to worry about this. A representative from Omega's domestic PR agency said, "Usually, taxes and other costs are handled internally by Omega," adding, "The athletes receive the watches without any separate cost burden." This means that not only the watches but also the taxes are borne by Omega. The watches have not yet been delivered to Osangwook and Oyejin. Both athletes still have competition schedules remaining, so now is the time to focus on the Olympics.