KLPGA’s tax policy angers some top players

Golfers who competed in the ING Life Insurance Champions Trophy last month are upset with the Korea Ladies Professional Golf Association (KLPGA) because of the way it taxed their winnings.

The ING Life Insurance Champions Trophy was held at the Bayside Golf Club in Busan from Nov. 27 to 29, featuring top Korean golfers from the U.S. LPGA Tour and KLPGA Tour going head-to-head on separate teams. With 12 players each, the two teams played fourball and foursome matches as well as single match play.

The Champions Trophy is not part of the KLPGA Tour, though the association sanctioned the tournament. But after it ended, participants including world No. 2 golfer Park In-bee, who was captain of the LPGA team, reportedly complained that the KLPGA taxed part of their prize money for its “development fund” without prior notice, even though the event itself is not listed as an official tour event.

The KLPGA usually collects money from golfers when they play Tour events for the fund, which it uses to finance itself and operate events.

“We asked the KLPGA to correct this, but they refused,” said an official from MBC, the organizer and broadcaster of this promotional event. “We are sorry to players who are invited to play, and we are not sure whether this event can continue next year due to this issue.”

The Champions Trophy had a total purse of 1 billion won ($847,000), of which the LPGA Team earned 650 million won by winning 14-10. Since there were 12 players on the team, LPGA golfers collected 54.16 million won apiece - minus a combined 10 percent for the development fund (6.7 percent) and national taxes (3.3 percent).

Things were worse for LPGA Team members Shin Ji-eun and Lee Mi-hyang, who were taxed an additional 22 percent - receiving only 36.83 million won - because they currently reside overseas and are not members of the KLPGA.

During the season, KLPGA members are required to pay 6.7 percent of their prize money for the fund, while non-KLPGA members are taxed 10 percent.

In the U.S. LPGA, its rate is the same for both members and non-members, at 6 percent.

Some players said if they receive back the money that went to the development fund, they plan to donate it to charity, while others added they won’t participate in this particular event in the future.

The KLPGA said on Wednesday that it had, in fact, notified players it would be collecting money for the fund.

“Although the collection wasn’t mentioned in the tournament rules, it was finalized through our board meeting,” an official from the KLPGA said on the condition of anonymity. “Whether it is an official event of the KLPGA Tour or not, the association can collect for the development fund when there is prize money involved. We also notified players in advance.”

However, the KLPGA said that it will review its development fund collection rules as well as the percentages because of the complaints from golfers.

BY SUNG HO-JUN [joo.kyungdon@joongang.co.kr]