Sports Professionals in International Tax Law

While Maltese law does not provide for a definition or description of the activities that amount to a sports professional, the OECD Model Convention provides:

Notwithstanding the provisions of Articles 7 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

2. Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.

(Article 17)

In July 2010, a ‘Discussion Draft on the Application of Article 17 (Artistes and Sportsmen) of the OECD Model Tax Convention’ was published to be discussed by the Working Party on Tax Conventions and Related Questions.  The Sub-Group proposed several amendments to the qualification of entertainers and sportsmen, particularly in relation to definition of personal activities and the level of involvement in each state, in order to clarify the allocation of tax liability to the different countries in which income arises.

Tax Structures for International Sports Professionals

Professional sportsmen who are not resident in Malta may benefit from advantageous tax opportunities in Malta.  Apart from the Malta Income Tax provisions, the income of sports professionals may be received in Malta or routed through Malta in the form of royalties.