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Belgium: Beneficial tax regime for professional sportsmen

It has been reported that the Belgian Parliament has adopted a legislative proposal which will improve the tax regime for professional sportsmen as per 1 January 2008. The amendment will contain the following elements: - currently only the wage of foreign players are eligible to the application of a reduced tax rate of 18%. For Belgian players the rate exceeds 40%. In particular in football and basketball this difference stimulate the contracting of medium level foreign players. In order to stop this phenomenon, a new reduced rate of 16.5% will be applicable to foreign and Belgian players who are between 16 and 25 years old and who earn at maximum EUR 15,720. For professional players who are older than 25 years the applicable tax rate to their income from sports activities will be 33%. Condition is that their other income is higher than that income from sports activities. - Non-resident artists and sportsmen who are active in Belgium for a period which does not exceed 30 days the rate of 18% continues to exist. - The proposal is not only applicable to sportsmen, but also to e.g. trainers, referees, coaches, etc. Their income will also be taxed against a rate of 33%. Most striking element from the proposed legislation is that the clubs that employ professional sportsmen do not have to pay 70% of the wage tax due on the salaries to the professional sportsmen to the Belgian tax authorities. The condition is that these amounts are invested in the youth education and training of that club. For players older than 25 years only 50% of the wage tax needs to be invested in the youth education and training.

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