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The Netherlands: Evaluation of its tax regime for income from sports activities soon to be expected

The last years the Netherlands tax legislator has been very active in reforming the tax system for income from sports activities. As a consequence, more and more income that is related to sports activities exercised in the Netherlands is considered to be covered by these provisions. The Royal Netherlands Football Association (KNVB) has made public its concern regarding the current regime in general and three current developments in particular. Withholding tax on gross amount First of all the 20% withholding tax on income from sports activities carried out in the Netherlands is in the case of foreign gootball clubs or foreign associations to be applied to the Netherlands source entire income. In as far as this income is not paid through to the athletes this may often not be in agreement with the tax treaty attribution rules. If the country of residence of the foreign club or association takes another approach regarding the part of the income that is not paid through to the athletes the Netherlands view may easily lead to international double taxation. Broadcasting rights Secondly the Netherlands tax authorities take apparently the view that television broadcasting rights regarding sports activities exercised in the Netherlands are always taxable in the Netherlands. As an example it was mentioned that if Barcelona would for its preparation for the new season stay several weeks in the Netherlands, the value of the television videos of the activities in the Netherlands would be subject to the Netherlands 20% withholding tax. Apparently it is probable that Barcelona will this season not make a visit to the Netherlands in the course of the preparation for the next season. Test matches of the Netherlands team outside of the Netherlands Considering the above mentioned Netherlands tax claim the Netherlands Football Association considers the option of playing these matches of the Netherlands national team in stadiums in Belgium or Germany, certainly where the opponent originates from a commercial important country. No more Champions League or UEFA Finals in the Netherlands? After the 2002 UEFA Final in Rotterdam the UEFA is aware of the Netherlands tax situation. It was only because of the fact that the Final was played between Netherlands resident Feyenoord and a Germany resident opponent that in effect – due to the Netherlands German tax treaty - no withholding tax could be levied. Attempts to organize the 2004 Champions League Final in the Netherlands have at the level of the UEFA been hampered by the Netherlands tax regime, because apparently the UEFA is of the opinion that the Netherlands tax burden is too high. Parliamentary question and reply A Member of the Netherlands Parliament has asked the Under Minister of Finance for his reaction to the above issues. The reply was that these elements would be taken into account in the context of the evaluation of the tax regime for athletes (and artists) by the end of 2003.
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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.

The Editors

Managing editor
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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