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OECD Consults On Sportertainers Tax Treatment

by Ulrike Lomas, Tax-News.com, Brussels

26 April 2010


The Organisation for Economic Co-operation and Development (OECD) Committee on Fiscal Affairs is consulting on draft changes to the Commentary on Article 17 of the OECD Model Tax Convention, which deals with cross-border income derived from the activities of entertainers and sportsmen.

Under Article 17 (Artistes and Sportsmen) of the OECD Model Tax Convention, the State in which the activities of a non-resident entertainer or sportsman are performed is allowed to tax the income derived from these activities.

This regime differs from that applicable to the income derived from other types of activities making it necessary to determine questions such as what is an entertainer or sportsman, what are the personal activities of an entertainer or sportsman as such and what are the source and allocation rules for activities performed in various countries.

A public Discussion Draft has been published on these and other questions together with proposals for additions and changes to the Commentary on the OECD Model Tax Convention.

The Discussion Draft suggests that the regime should not apply to racing prize money won by owners of horses or race cars. However, if the owner receives a payment on behalf of the jockey or race car driver, that income may be taxed in the hands of the jockey or race car driver.

The Draft also suggests that the tax regime should not extend to visiting conference speakers (eg former politicians who receive fees for speaking engagements), nor to models presenting clothes during a fashion show or photo session, nor to administrative or support staff (eg cameramen for a film, producers, film directors, choreographers, technical staff, road crew for a pop group, etc).

An Annex includes a consolidated version of the Commentary on Article 17 that includes all the proposed changes.

The changes will not be finalised in time for inclusion in the next update, which is scheduled to be published in the second part of 2010. The OECD therefore invites interested parties to send their comments on this discussion draft before 31 July 2010. These comments will be examined by the OECD at a meeting in September 2010.

TAGS: tax | interest | entertainers | fees | sportsmen | legislation

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