Tax Treaty Case Law around the Globe 2021

S. 190I. Introduction

The issue in the case decided by the Polish Supreme Administrative Court on 27 November 2019 (II FSK 157/18) concerned taxation of the payment of “match sums” made to foreign football federations under Article 21(1)(1) of the Polish Corporate Income Tax Act (CITA) and Article 17(2) of double tax treaties concluded by Poland, in particular, whether the Polish Football Association should withhold tax on such payments.

Pursuant to Article 21(1)(1)(2) of the CIT Act, payments to non-resident legal persons for “artistic, entertainment and sports activities”, i.e. primarily for a commitment to ensure the participation of certain persons in the event, are subject to withholding tax in Poland. The provision covers, for example, payments made under an agreement with the “representative” of an artist or sportsman. The “representative” may be an artistic (sports) agency acting for the artist (sportsman), an entity employing artists or sportsmen (theater, orchestra, sports club) or another entity ensuring the participation of a foreign entertainer or sportsperson in an event taking place in Poland. Polish regulations on withholding tax correspond to the structure of the provision...