Taxation is one of the issues that concern athletes, since a good sum of money is at stake. An issue where the Double tax agreements that signs countries with other states. In the case of athletes and in what refers to Spain, article 17 of the agreements to avoid the double tax Iñigo ABROGOFirm Prosecutor’s partner PKF attest.
This article 17 of the agreements to avoid the double imposition (CDI) refers to the income of artists and athletes. Abrego explains: “In the field of motoring and motorcycling Professional, the application of article 17 is carried out quite regularly. The State Tax Administration Agency (AEAT) in Spain requires non -resident pilots of taxation for income generated in Spanish territory derived from their participation in sports competitions. This position has even been one step further in recent years: Various tax administrations, including the Spanish, have begun to demand taxation not only for the race itself, but also for the “testing” services or previous evidence“.
Abrego refers to the tests in which the equipment puts cars or motorcycles and pilots prepare for the competition. Since 2014, comments to the CDI models of the Organization for Economic Cooperation and Development (OECD) already expressly collect that These activities should be considered within the concept of “athlete’s income”by functionally equating with training. “This approach has been incorporated by several tax administrations, which extends the tax base subject to taxation in the country where these tests are carried out,” explains Abrego.
The “non -aggression pact” between countries with football
What happens in other sports such as football or cycling? That the application of this article 17 is not so rigorousin the case of cycling due to the difficulty of ensuring that he is training in Spain and in the case of football for a “non -aggression pact” between countries.
-Iñigo Abrego explains it: “In the case of cycling, it is extremely complex to control whether a non -resident cyclist is effectively training in SpainA, due to the individual, mobile and discreet nature of training. Therefore, in practice, taxation on these potential income remains many times without applying, “he says.
“Even more striking is the case of football, where what some qualify as a “non -aggression pact” is perceived between fiscal administrations of different states. Although many clubs in northern Europe carry out prolonged concentrations and preseason in southern Spain – especially in regions such as Andalusia or the Valencian Community -, do not usually be demanded from non -resident players the taxation due CDI “, extends Abrego.
Different interpretations
This unequal treatment therefore generates A tax disadvantage situation for motor sports regarding other sports disciplines. While in MotoGP or Formula 1 the principle of territoriality of sports income is strictly applied, in football a more lax interpretation is tolerated, due to the practical difficulty of managing this taxation or fiscal policy reasons between countries.
“In conclusion, the application of article 17 of the CDIs in the sports field reveals a heterogeneous panorama, where factors such as the traceability of the activity, the number of involved, and cooperation between fiscal administrations determine the real degree of compliance and tax demand,” concludes Abrego.
