The internationally mobile athlete: on pitch, on track, on image – advising professional sporting clients

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Frédéric Epitaux                                                        


Oberson Abels SA, Lausanne                                     


Cameron Lee

LPC UK, London



Report on session at the 25th International Private Client Conference

Monday 2 March 2020

Session chair

Kevin Lee Stephenson Harwood, Hong Kong SAR


Daan Buylaert Tiberghien, Gent

Pete Hackleton Saffery Champness, London

Ian Lynam Northbridge Law, London

Raul-Angelo Papotti Chiomenti, Milan (by videoconference)

Fabio Rodriguez Pegas Nogueira Pegas Advogados, Estoril


This panel discussed the opportunities and challenges that are facing the internationally mobile athlete from the perspective of various jurisdictions.


Different tax treatments of resident sportspersons

In Italy, a resident sportsperson can benefit from the (ordinary) resident non-domiciled regime. This regime entails a full exemption of foreign source income. As such, it does not cover employment income in Italy, which remains subject to ordinary income tax. The main advantage of this regime for the resident sportsperson is that it enables the sportsperson to avoid taxation on image rights (held in a foreign company) and other entrepreneurial activities that the sportsperson might conduct abroad. This regime is mainly useful for established players.

Alternatively, a sportsperson can apply for a special regime, which can be chosen instead of the resident non-domicile regime. It allows for an advantaged taxation of employment income with a reduction of up to 35 per cent. The player must have been resident abroad for at least two years before coming to Italy. In addition, the player must stay in Italy for at least two years and work for more than 183 days in Italy. Most players elect this regime, which is valid for a five-year period (renewable), since it covers employment income paid by Italian clubs. It has, however, no effect on the taxation of image rights held abroad.

In Belgium, the player is subject to the same regime as ordinary employees. Young players can benefit from some favourable tax rates. Also, the clubs benefit from a cap on the social security contributions on players' salary and they can reinvest 80 per cent of the wage tax on the player's salary into compensation of other young players or staff members.

In the United Kingdom, resident sportspersons can benefit from the (ordinary) resident non-domiciled regime. This means that they are only taxed on their UK earnings and on the foreign income which is remitted to the UK (remittance basis principle). Special attention should be given to the timing of arrival in and departure from the UK. Work days spent outside of the UK are not taxable (overseas work relief). Interestingly, Ireland provides for a specific tax regime for athletes, who can reclaim the tax paid for the last ten years if they retire in Ireland. This applies mainly to Irish rugby players.

In Brazil, a sportsperson can benefit from a split of personal salary and exploitation of image rights. While personal salary is taxed at 30 per cent, the exploitation of image rights, held in a company, is taxed at 18 per cent. In Portugal, there is a special tax regime for players coming from abroad with a ten-year tax holiday. This regime does not extend to employment income paid by the club, which remains subject to ordinary taxation. In practice, there are negotiations with clubs to include the tax in the payments made to the player (gross-up).

Agents' fees

In Italy, the commissions received by agents are ordinarily taxed. For several years, there were issues regarding to whom the services were being provided (the sportsperson or the team) and, therefore, which party was really paying the commissions. Regulations in 2015 and 2019 have provided that agents can now represent both a sportsperson and a team in a contract negotiation.

In Belgium, agents are usually paid by the acquiring club on behalf of the player. This leads to a benefit in kind from the club to the player, which remains tax neutral since players are taxed on their net income. In that regard, agents' fees are considered as deductible professional expenses. Conversely, the value added tax (VAT) on the agents' fees is not recoverable in such cases.

In the UK, Her Majesty’s Revenue & Customs (HMRC) accepts in principle a 50/50 split if the agent acted for both the club and the player. In specific cases, HMRC might accept a different split if there is sufficient paperwork to justify it. The club can recover VAT on the portion of the agent' fees attributable to the club.

Release clauses

There is a distinction between ‘release’ and ‘buy-out’ clauses. A release clause provides for a situation where another club offers to acquire a player and his club agrees to this acquisition. A buy-out clause involves the player paying a certain amount to his club to let him go before the end of his contract. A buy-out clause might have tax implications if the amount of the buy-out is actually paid by the new club on behalf of the player, not directly by the player. In such cases, the buy-out could be taxed as a benefit in kind for the player.

Player loans

Generally, the lending club continues to pay part of the salary of the loaned-out player. This can create tax complications since both clubs, usually located in different states, pay a portion of the player's salary. In principle, the salary is only taxable in the country of exercise. This means the club of origin, still paying part of the salary, would have to register as an employer in the other state. A loan transaction can however take different forms: it is also possible that the lending club continues to pay the salary in full and receives a loan fee from the other club. The tax implications will therefore depend on the way that the loan transaction is structured.

Image rights

Image rights are an important component of the sports sector and an additional source of revenue for top players. Such rights can be assigned to a ‘star company’, which will have the right to use the player's image.

In this respect, Italy follows the restrictive, anti-avoidance rule of paragraph 2, Article 17 of the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention. If the interposed ‘star company’ lacks substance, the tax authorities will see through it and tax the income at the individual level rather than at the corporate level.

In the UK, HMRC generally accepts the assignment of image rights to a company but considers the income from image rights to be UK-sourced. In Brazil and Portugal, the tax authorities also accept the assignment of image rights to a company. Such assignment should be made before the player moves to another country.


In general, there is no perfect structure for sportspersons moving from club to club in different countries. The player should pay special attention to the possible exit scenario from the structure put in place, and the impact of this structure upon their return to their home country.

The situation is different for touring athletes such as Formula 1 drivers, golfers and tennis players. Such athletes are taxed at source on their performance income. The UK, the US and Canada have stricter rules according to which a portion of the worldwide endorsement income is also subject to tax at source. As a result, some athletes avoid performing in competitions taking place in these countries.

For such touring athletes, it is not always good to have a corporate structure, where the sports income would ultimately have to be distributed to the athlete. It might be better that the athlete is paid directly for their performance in the country. This would trigger taxation at source, but the player could benefit from an exemption or a credit in their state of residence based on the relevant double tax treaty. This, however, entails a compliance burden.


One potential issue is where an athlete engages in ‘less than scrupulous’ behaviour and, in doing so, jeopardises their reputation and that of their team. The consequences may be twofold. Firstly, termination clauses are standard, broad, and non-negotiable elements of most team contracts. As such, a team may be well within its rights to end all association with the athlete. Secondly, the athlete may be endangering sponsorship deals or similar exploitations of image rights due to regularly inserted ‘morality clauses’ designed to protect sponsors. The coverage of these clauses can vary from contract to contract, and some sponsors may fight to have the final call on what ‘reasonably’ constitutes ‘bad behaviour’.

Controlling damage to reputation may be necessary even in situations where one would expect the athlete’s agent to step in. This may involve monitoring the client’s interests and assets to avoid unnecessary controversy as a result of certain affiliations. For example, a client may have invested in certain interests while playing abroad but such investments may not be well received upon return to the client’s home country. Likewise, the client’s personal associations and contacts, often with childhood friends and family looking to capitalise on the client’s success, can be a source of problems especially if the client is not from an affluent background.


The advent of competitive video-gaming has given rise to questions regarding whether video-gaming is itself a sport, and whether a change in approach is required when handling esport clients.

The English High Court ([2015] EWHC 2875) came to the conclusion that the card game bridge was not a sport because it lacked the requisite ‘physical exertion’. According to the reasoning of the court, the determining factor was whether the game’s physical act itself involved any skill. The physical act of placing a card does not involve skill, but rather the skill is in deciding which card to play. By comparison, the physical act of throwing a dart in the sport of darts actually involves skill, even if absent much physical strain. Similarly, one might see how the physical acts of clicking buttons or moving a mouse (actions involved in esports) involve skill because of the reflexes and speed involved. Thus, there is an argument that esports are sports.

The decision to advise esports clients involves different considerations. Where an esports competitor is successful, said competitor may be young and in possession of significant amounts of money. This may call for the involvement of the competitor’s parents and the use of a holding mechanism for any winnings until the competitor is of suitable age. Regarding taxation of winnings and what should be withheld, much of this is unventured territory for English tax law. As the presence of esports and the winnings involved grow, HMRC is more likely to stamp its authority on the area. From a European tax perspective, esports are certainly considered sports. In Belgium, esports competitors coming to Belgium to compete in tournaments will be considered non-resident athletes subject to a flat-rate tax of 18 per cent on revenue.

Closing remarks: getting into the sector

Getting involved in sports law is a matter of obtaining experience in the sector and eventually developing expertise. This involves building a client base of individual athletes or broader institutional parties and gaining referrals. Building trust with clients is key, especially with young clients and their parents. One way to do this is to guide athletes on issues beyond their careers, such as structuring affairs and life after sport.


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