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THE NETHERLANDS: Court holds that non-resident Dutch football player is discriminated against for income received during the 2000 European Championship

In 2000 Belgium and the Netherlands co-organised the European Football Championship. The two countries agreed with the Union of European Football Associations to tax non-resident players by the levying of an 18% withholding tax. The Netherlands and Belgium retained the right to levy any additional income tax to which they were entitled under the tax treaties concluded by them. Only six football players of the Netherlands football team had received an income tax return, the filing of which is then obligatory. On 17 March 2006 the Court of First Instance of Breda decided regarding a case concerning the income tax levied on the basis of the filed income tax returns (decision of 17 March 2006, AWB 05/216). The pertinent taxpayer was one of the five players who had appealed against the subsequent income tax assessment. It appears that the Netherlands tax unit dealing with the taxation of sportsmen had intentionally not handed out income tax returns. During the proceedings before the Court the tax inspector admitted that he had for practical reasons intentionally not handed out tax returns to all football player who would have been eligible to pay additional Netherlands income tax above the 18% withheld wage tax. Parties agreed that around 10% of the in total 325 football players that were active during the European Championship would actually have had to pay additional Netherlands income tax. How this number was determined has not been revealed in the decision. The taxpayers held that the levying of additional income tax due was a case of forbidden discrimination on the basis of nationality and in conflict with the equality principle. The taxpayer did an appeal on the Netherlands Constitution, and the commonly referred to international law provisions (e.g. EC law and the International Covenant on Political and Civil Rights). The Court held that the pertinent football player was treated in a different manner than the approximately 10% of the 325 football players. The Court held that the Tax Inspector had applied a policy which benefited the other players and that therefore the pertinent taxpayers were entitled to a similar income tax treatment. This meant that the remuneration received for participating in the 2000 European Football Championship should not more heavily be taxed than the 18% withheld wage tax. The Court held that it need not deal with the other arguments of the taxpayer. It is possible that the tax authorities will go into appeal against this decision; this has not yet been published.
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The editors of  the Journal Sports Law & Taxation are Professor Ian Blackshaw and Dr Rijkele Betten, with specialist contributions from the world's leading practitioners and academics in the sports law and taxation fields.

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Dr. Rijkele Betten

Consulting editor
Prof. Dr. Ian S. Blackshaw

Editorial board

Prof. Guglielmo Maisto
Maisto e Associati, Milano

Dr. Dick Molenaar
All Arts Tax Advisors, Rotterdam

 

Mr. Kevin Offer
Hardwick & Morris LLP, London

Mr. Mario Tenore
Maisto e Associati, Milano

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