Tax Treaty Case Law around the Globe 2019

S. 3261. Introduction

The case reviewed in this chapter deals with the qualification of a lumpsum payment derived by a professional football player from the exploitation of his image/portrait rights under the Belgium-Croatia Income and Capital Tax Treaty (2001) (hereinafter: Belgium-Croatia Tax Treaty), more precisely whether it falls under the scope of article 12 (Royalties) or article 14 (Independent Personal Activities). Despite not being addressed by the Court of appeal, the present contribution also examines the potential application of other provisions of the tax treaty such as for example article 15 (Income from Employment) and 17 (Artistes and Sportsmen).

2. Facts of the Case

The taxpayer is a Croatian national, who was active as a professional football player in Belgium. Between September 2006 and June 2010, he had an employment contract with “Sporting Lokeren”, a Belgian football club in the first division and established in Lokeren, Belgium.

Besides the aforementioned employment contract with Sporting Lokeren, the taxpayer signed approximately one year later (in July 2007) a further agreement with a consultancy company, pursuant to which he was entitled to a [single] lump-sum paym...