South Korean firms spent almost 600 billion won ($431 million) on corporate credit cards at adult entertainment venues in 2024, with more than half spent at high-end hostess bars known as room salons.
The data, released Sunday by Rep. Kim Young-jin of the National Assembly’s Strategy and Finance Committee, is based on official records submitted by South Korea’s National Tax Service.
It shows that payments classified as “client hospitality expenses” totalled 16.2 trillion won in 2024. While much of that went toward meals and business-related events, nearly 600 billion won was spent at adult entertainment establishments that typically offer alcohol, food and various forms of entertainment such as singing, dancing or companionship.
Of that spending, 55 percent, or 328.1 billion won, was spent at room salons. Such establishments tend to be more expensive as they offer private rooms, premium alcohol and greater exclusivity. Another 21 percent, or 125.6 billion won, was spent at karaoke hostess bars, according to the tax agency data.
The total spending figure is slightly down from 2023, when corporate card use at adult entertainment venues reached 624.4 billion won. Still, the five-year total now exceeds 2.4 trillion won, pointing to a persistent pattern of using company funds for adult-oriented entertainment.
Under current Korean tax law, businesses can deduct a portion of client hospitality expenses from their taxable income, but only within a set limit based on company revenue. In 2024, 68.7 percent of total entertainment spending (11.1 trillion won) qualified as deductible. The remaining 5 trillion won fell outside allowable limits.
“If a corporate card is used at an adult entertainment venue strictly for business hospitality, it can be recognized as a deductible expense,” a National Tax Service official said. “But that doesn’t mean everything qualifies. It is only accepted within a specific overall limit.”
Rep. Kim has urged tax authorities to tighten the rules, saying, “Tax authorities must consider lowering the deduction cap for client entertainment spending at adult entertainment establishments,” he said.
“Corporations should redirect superfluous client entertainment budgets toward (research and development) and long-term competitiveness.”
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‘ Some details of this article were extracted from the following source www.koreaherald.com ’
