YONHAP NEWS

Gov't pushes for corporate tax cuts for unpopular sports

SEOUL, March 10 (Yonhap) -- The government said Wednesday that it plans to provide more tax support aimed at encouraging local companies to operate amateur teams for unpopular but promising sports.

   The move comes as South Korea made a better-than-expected showing in the Vancouver Winter Olympics, where the nation has won its first-ever gold medals in speed skating. The surprise results have prompted officials to consider support for what have been relatively unpopular sports here in the past.

   The Ministry of Strategy and Finance said in a press release that it has designated 15 sports categories that could get tax benefits in launching and running amateur teams from this year. They include skating, hockey, boxing, wrestling, handball, fencing and yachting.

   The selection was based on the low quality of training facilities and the absence of professional leagues that make it difficult for athletes to continue with their careers despite successful performances or strong potential, the ministry said.

   Companies that run a sport team belonging to those categories will be able to count 120 percent of labor and operation costs as expenses for three years after its launch. This means they can get more tax cuts than under current law which allows 100 percent of such costs to be counted as expenses.

   If a company spends 1.5 billion won (US$1.3 million) annually for a sport team, it could get around 73 million won in tax support every year, the ministry explained. The move is aimed at encouraging the launch of sports team by easing their initial financial burden, it added.

   Tax benefits will also be given to land holdings if they are used to construct sports facilities. Pay and pension that an athlete receives will also be eligible for tax benefits, a move the ministry expects would bolster their morale and competitiveness in sports areas that are not in the public spotlight.

   As of 2008, companies, state-run businesses, associations and others run a total of 968 amateur sports teams in 48 categories, according to the ministry. It is much higher than 382 reported in 1990 but the number of teams owned by private companies have declined from 194 to 119 over the same period due to higher operation costs but lower promotional effects.

   kokobj@yna.co.kr
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