Corporate Cards Spent 600 Billion Won at Entertainment Establishments Last Year... More Than Half Went to Room Salons

Entertainment Establishment Spending Reaches 596.2 Billion Won... Room Salons Account for 55%
"Companies Should Cut Unnecessary Entertainment Expenses"

Last year, the amount spent using corporate credit cards at entertainment establishments reached 600 billion won. More than half of this was spent at room salons.

According to data submitted by the National Tax Service to Assemblyman Kim Youngjin of the National Assembly’s Strategy and Finance Committee on September 14, the total amount reported as corporate tax entertainment expenses last year was 16.2054 trillion won, an increase of 5.7% compared to the previous year.

Of this, the amount spent at entertainment establishments was 596.2 billion won. Although this represents a 4.5% decrease from the previous year's 624.4 billion won, it still remains a significant figure.

The amount spent using corporate cards at entertainment establishments exceeded 1 trillion won in the early 2010s but gradually declined to 860.9 billion won in 2019 and 439.8 billion won in 2020. It then sharply decreased to 212 billion won in 2021 due to the impact of COVID-19, before rising again to 563.8 billion won in 2022 and 624.4 billion won in 2023. The cumulative amount spent over the past five years totals 2.4362 trillion won.

Looking at last year’s expenditures, room salons accounted for 328.1 billion won, making up 55% of the total. This was followed by karaoke bars (125.6 billion won), high-end bars (72.3 billion won), theater-style restaurants (53.4 billion won), and nightclubs (16.8 billion won).

Of the total 16.2054 trillion won in entertainment expenses last year, 11.1354 trillion won, or 68.7%, was recognized as deductible under tax law. The remaining 5.0701 trillion won was treated as non-deductible. A National Tax Service official explained, "Expenditures at entertainment establishments can be recognized as entertainment expenses, but only within the total allowable limit."

Assemblyman Kim stated, "We need to consider reducing the deductible limit for business promotion expenses used at entertainment establishments," adding, "Companies should also cut unnecessary entertainment expenses and focus on strengthening their competitiveness through productive investments such as research and development (R&D)."

Meanwhile, the amount spent using corporate cards at golf courses last year was 2.0585 trillion won, a 10% increase compared to the previous year's 1.8712 trillion won.