#sportsandtax #Vivalditaxreform #taxaudits #agents
Sunday, 8 November 2020 - The Minister of Finance Vincent Van Peteghem’s policy note repeats the Vivaldi Government’s intention to reform the current tax and social security regime for athletes and clubs, announcing also severe measures to increase transparency and compliance on agent’s fees.
Scandals within Belgian football, including corruption and money laundering, have bolstered the public’s outrage over the current tax and social security regime for athletes and clubs.
Not surprisingly, the Vivaldi government agreed to an investment plan end of September 2020 envisaging a reform of the current (para)fiscal legal framework for athletes and clubs. The government intends to establish a well-balanced system providing in a fair contribution by each sports sector in line with its resources and increase audits on agents.
On 4 November 2020 the Minister of Finance further laid out his plans, announcing to also issue a circular letter in the course of 2021 regarding the tax treatment of agent’s fees.
What is the issue? Today it is common for clubs to pay the agent’s fees on behalf of the player. To the extent that the fees remunerate services provided by the agents in benefit of the player, the club’s payment of the agent’s fee on behalf of the player results in a corresponding taxable benefit in kind in the hands of the player.
With the circular letter the Minister aims to increase transparency and compliance relating to the benefits in kind for agent’s fees. Clubs and agents should be aware that this will be accompanied by increased tax audits on the processing of the benefit in kind.
No further details on the content of the circular letter have been made available yet, but clubs would welcome practical guidelines in particular relating to their withholding tax obligations, the processing of the relevant invoicing, etc.
During the 2020 summer transfer window, your Atfield lawyers have already provided support to their clients on how to implement the tax legislation for agent’s fees, as clubs and players are advised to anticipate tax enquiries in this respect.
If you have questions regarding this matter, please contact:
Tour & Taxis
Havenlaan/Avenue du Port 86C B414
T +32 2 421 94 94