Registration requirements and fees
Are there any registration requirements, or any fees/taxes payable?
In terms of registration requirements, as discussed above in the section on prize draws, any business involving 'speculative acts' must be approved in advance by the district police. However, it is unclear whether this requirement applies to a contest in which the contest sponsor does not directly collect commission or fees from the contest itself, but rather receives an indirect benefit, such as publicity.
Fees / Taxes Payable
There are no fees payable.
In terms of taxes, a prize is considered 'other income', and subject to personal income tax and local income surtax. Where the value of a prize exceeds ₩50 000 (approx. US$42) the prize-giver is required to withhold 22% of the prize amount for tax purposes. When a Korean company (or foreign company's Korean affiliate) engages in prizes to promote sales, the value of the prizes is deductible as expenses incidental to sales for corporate income tax purposes.