On August 26, 2022, the Ministry of Culture, Sports and Tourism (the "MCST") announced a legislative proposal for partial amendment (the "Amendment") to the Enforcement Decree of the Installation and Utilization of Sports Facilities Act (the "Sports Facilities Act") by its Notification No. 2022-0261.

Under the amended Sports Facilities Act (Act No. 18860, partially amended on May 3, 2022), which takes effect on November 4, 2022, the existing distinction between "membership-based golf courses and public golf courses" will be changed to "membership-based golf courses and non-membership-based golf courses."  A non-membership-based golf course that meets the requirements for user fees, etc. may be designated as a public golf course and be eligible for government support.

The Amendment sets forth the requirements and procedures for the designation of public golf courses, and the details are as follows (other detailed standards and procedures will be determined and notified by the Minister of MCST).
 

1.   Requirements for Designation as a Public Golf Course

The Minister of MCST (the "Minister") may designate or re-designate a golf course that meets the following requirements as a public golf course with effective term of three (3) years (Article 7-2 of the Amendment):

• A golf course that is registered as a non-membership-based golf course;
• A golf course that charges green fees lower than the average green fees charged by membership-based golf courses to non-members (based on the results of a market survey conducted by the Minister in the immediately preceding year) less a certain amount publicly notified by the Minister (based on the difference in the tax amount imposed on membership-based golf courses and public golf courses);
• A golf course that applies the standard terms and conditions for the use of the golf course; and
• A golf course that complies with the plans for green fees submitted when applying for designation or re-designation (limited to re-designation).

As you can see, the main requirement to receive the public golf course designation (or re-designation) is low green fees.  To our understanding, the above requirement reflects the government's intention to reduce green fees and make golf a more approachable sport to the public.
 

2.   Procedures for Designation of Public Golf Courses

A sports facility business entity registered as a non-membership-based golf course business may file an application for designation/re-designation of a public golf course to the Minister, along with a plan for golf course usage fees and the terms and conditions of use.  The Minister shall identify whether the applicant meets the requirements and notify the applicant within 30 days of the result.
 

3.   Change of Relevant Terms

In addition, the term "public golf course" in the Enforcement Decree of the existing Sports Facilities Act will be changed to a "non-membership-based golf course" in the Amendment.  In line with the above, the proposed partial amendment to the Enforcement Rule of the Sports Facilities Act (MCST Notification No. 2022-0262) was also announced.
 

Accordingly, relevant laws, including tax laws, will be additionally amended to adjust the scope of application for tax benefits to golf courses (such as exemption from individual income tax and heavy property tax as well as reduction of acquisition tax).  Thus, further Amendment details will come, including the direction of adjustment to the relevant tax laws. 

Companies can submit their opinions on the proposed amendment plans, including the proposed partial amendment to the Enforcement Decree of the Sports Facilities Act, by September 26, 2022.

[Korean version]