Do we need to file short-stay revenue and overnight-stay revenue separately?
For VAT purposes, short-stay and overnight revenue are combined and filed together, but since rates and room turnover differ between them, tracking them separately internally allows for more accurate revenue analysis. Lodging is a mandatory cash-receipt-issuance business, so cash payments of KRW 100,000 or more must be issued a receipt even without the guest's request, and failing to do so triggers a penalty of 20% of the unissued amount — given the high share of cash payments typical in this business, we recommend paying particular attention to avoiding missed issuances.
The Trickiest Part — Short-Stay/Overnight Revenue Segregation and Cash Receipts
Filing transparency is critical given the high share of cash payments typical in this business
Track Short-Stay and Overnight Revenue Separately
Short-stay and overnight stays have different rates and turnover, so tracking them separately allows for more accurate revenue analysis and filing. For VAT purposes, both revenue streams are subject to tax and are reported combined.
Be Thorough About Cash-Receipt Issuance
Lodging is a mandatory cash-receipt-issuance business, and cash payments of KRW 100,000 or more must be issued a receipt without needing the guest to ask. Given the relatively high share of cash payments in this business, pay particular attention to avoiding missed issuances.
Income Structure Features of Motels & Business Hotels
Key Expense Items
Must-Know for Motels & Business Hotels
Split Room Fixtures & Labor Costs by Category to Save on Taxes
From room fixtures to OTA fees, categorizing each item correctly is what cuts unnecessary tax
Long-Term Fixed Assets — Facilities Subject to Depreciation
Room fixtures: beds/furniture, HVAC systems
Operating fixtures: front-desk system, CCTV
Once a per-unit purchase exceeds KRW 1 million, it's classified as a depreciable asset and must be expensed over its useful life.
Linen & Laundering — Immediate Expense
Outsourced linen-laundering costs, amenities, and similar items are expensed in full at the time they're incurred. With high room turnover, spending occurs frequently, so capture every expense without gaps.
Personal-Service Costs — Shift-Based Labor Costs
Front-desk and cleaning staff require withholding-tax filing and submission of a payment statement regardless of shift pattern, and overnight shifts require checking for an overnight-shift premium.
Online Travel Agency (OTA) Fees
Intermediary fees from OTAs such as Yanolja and Yeogieotae are a recurring monthly cost; record the total lodging fee as revenue and the fee as a separate expense.
| Category | Typical Examples | Tax Treatment |
|---|---|---|
| Long-term fixed assets | Room fixtures, front-desk system, CCTV | Depreciated once over KRW 1M |
| Linen/laundering | Outsourced laundering, amenities | Fully expensed immediately at cost |
| Personal service | Front-desk/cleaning shift labor costs | Withholding filed, overnight premium checked |
| Online travel agency | OTA intermediary fees | Expensed immediately, total revenue recorded |
Frequently Asked Questions
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