If our box hosts its own competition and charges an entry fee, do we need to report that revenue separately?
Yes — revenue from competitions or events you host yourself is also business-related revenue subject to VAT filing, and tracking it separately from regular membership revenue makes profit-and-loss analysis easier. Specialty equipment such as barbells, kettlebells, and pull-up bars is classified as a depreciable asset once the per-unit price exceeds KRW 1 million, and must be expensed over its useful life, while consumables like chalk, tape, and bands can be recorded as full expenses at the time of purchase.
The Trickiest Part — Flat-Rate Memberships and Coach Contracts
Managing revenue under an unlimited flat-rate membership model and correctly classifying coach contracts are the key issues
Recognize Even Flat-Rate Memberships Over the Usage Period
For unlimited monthly memberships, VAT is reported at each monthly payment, but if the usage period spans multiple months (as with annual payments), revenue must be prorated over the period for income tax purposes.
Structure Coach Contracts to Match How They Actually Work
If a coach independently manages their own classes and works across multiple boxes, a business-income (3.3%) freelance contract fits. But if they work fixed hours under the box owner's direction, they may need to be treated as an employee.
Income Structure Features of CrossFit Boxes
Key Expense Items
Must-Know for CrossFit Boxes
Split Specialty Equipment and Coach Pay by Category to Save on Taxes
From barbells to competition entry fees, categorizing each item correctly is what cuts unnecessary tax
Long-Term Fixed Assets — Equipment Subject to Depreciation
Specialty equipment: barbells and plates, kettlebells, pull-up bars/rings
Facility fixtures: rubber flooring, lockers
Once a per-unit purchase exceeds KRW 1 million, it's classified as a depreciable asset and must be expensed over its useful life.
Consumables — Immediate Expense
Chalk, tape, bands, jump ropes, and similar consumables are expensed in full at the time of purchase.
Personal-Service Costs — Coach Pay
Coaches are filed as business income (3.3% withholding) or employment income depending on how they actually work.
Separating Competition & Event Revenue
Revenue from competitions or events you host yourself is easier to analyze and file when tracked separately from regular membership revenue.
| Category | Typical Examples | Tax Treatment |
|---|---|---|
| Long-term fixed assets | Barbells, kettlebells, pull-up bars, mats | Depreciated once over KRW 1M |
| Consumables | Chalk, tape, bands | Fully expensed immediately at purchase |
| Personal service | Coach pay | 3.3% withholding or employment income |
| Competitions & events | Entry fees, event revenue | Managed separately from regular membership revenue |