Free article section

You are reading a Free article. Apply for a subscription to access all the valuable information on the website Sports Law & Taxation

Belgium: Valuation for tax purposes of diamond trophy in kind for non-resident female tennis player

It has been reported that the Court of Hasselt has on 7 July 2010 taken a decision in a case dealing with the valuation of a diamond trophy in kind won during an international female tennis tournament. The rules of the tournament held that a player who won 3 tournaments during a five year period would receive a diamond trophy. In the agreement with the main sponsor the value of this trophy was determined at 1 million EUR. The sponsor purchased the diamond trophy from a related company for the price of 250.000 EUR. In 2007 a tennis player, apparently Ms. Am?lie Mauresmo with the Spanish nationality, won the tournament for the third time in a 5-year period. She was thus entitled to receive the diamond trophy. The tournament organiser had to withhold 18% withholding tax on the price money and the value of the diamond trophy in kind won by the tennis player (who was not a resident of Belgium). The organiser valued the diamond trophy at 250.000 EUR, the cost price of the trophy for the sponsor. The tax authorities did not agree and insisted on application of the normal rules for determining the taxable value of benefits in kind: the amount which the recipient would have to spend to receive a similar benefit. The tax authorities referred to the agreement between the sponsor and the organiser and the publicity surrounding the tournament, and held that this amount was 1 million EUR. The Court of Hasselt held in favour of the organiser on the basis of the fact that the tax authorities failed to proof their assumed value as the real value of the trophy. The Court held that the sponsor agreement was no proof for the real value of the trophy because the winning tennis player was not a party to this agreement. The real value was according to the Court at best estimated by reference to the purchase cost for the sponsor of EUR 250.000. COMMENT RB: The decision of the Court of Hasselt appears to be rather sympathetic for the tennis tournament organiser. The published information of the Court case does not contain any reference to the fact that the sponsor ordered the trophy from a related group company, and that therefore the charged price may need to be scrutinised. It was not mentioned whether the tennis player could have bough the trophy herself for 250.000 EUR (whether or not from the company related to the sponsor). In this case the Court held that the purchase cost of the diamond trophy for the sponsor was a better indicator of the value than the value which was widely published in marketing campaigns of the tournament. One may wonder whether the tax authorities in the country of residence of the tennis player could be as easily convinced about this reduced value.
The Journal

Global Sports Law and Taxation Reports feature: articles; comparative surveys; commentaries on topical sports legal and tax issues and documentation.

The unique feature of Global Sports Law and Taxation Reports is that this Journal combines for the first time up to-date valuable and must-have information on the legal and tax aspects of sport and their interrelationships.

TheĀ Editors

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


Nolot BV
St. Jorisstraat 11
5211 HA  's-Hertogenosch
This email address is being protected from spambots. You need JavaScript enabled to view it.