The way professional athletes are taxed is always of great interest to the law. In a recent case before the Breda Court the tax office showed that they do not always have a professional approach and sometimes resort to outdated tactics. As a good referee does the court made quick work of the tax inspector in this game. All objections were rejected, court expenses reimbursed and damages awarded on top of that. End result pro athlete 3, tax office 0. Game, set and match, KO, game over!
The case:
As a professional athlete, X is employed by Sport club A. In 2002 he spent some time with the club abroad and has also played games abroad for the national team. In dispute is the deduction to prevent double taxation. Citing the judgement of the Supreme Court from February 9, 2007, nr. 40604 (BNB 2007/143), the Breda Court ruled that X was entitled to the deduction to prevent double taxation for the part of his salary which relates to the days in which he stayed abroad for matches including days other than match day. This does not include training camps according to the court as they are not connected to a performance for the public. The court also ruled in X’s favour with respect to the total number of days (230) that must be included in the denominator in the ‘voorkomingsbreuk’, the calculation to prevent double taxation. The court then granted X compensation for the court costs, because the inspector – despite the earlier 2007 case result – stood by his untenable position. Due to the case exceeding a reasonable timeframe the court also granted X €2,500 in intangible damages.
Source: Vakstudie Nieuws