Tax Treaty Case Law around the Globe 2014
1. Aufl. 2015
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S. 259Chapter 25 United States: Allocation of Payments Received for Royalties and Personal Services under Endorsement Contracts
Yariv Brauner
25.1. Introduction
This interesting case addresses the question of the proper characterization of payments under sportsmen's endorsement contracts. It analyses the question under both domestic and tax treaty law. In that, it is a follow-up on the Goosen case presented at this conference 2 years ago and a demonstration that the matter had not then been settled. Furthermore, it has wider implications regarding the ability of courts to handle (tax) valuation cases pertaining to intangibles.
25.2. Facts of the case
Sergio Garcia (Garcia) is a very successful professional golf player. He is a native and citizen of Spain and had been a resident of Switzerland at the relevant times. He has also been successful in attracting a variety of endorsement arrangements, assisted by a consulting company, yet making all relevant decisions himself.
On 8 October 2002, Garcia entered into a 7-year endorsement agreement (commencing 1 January 2003 and ending 31 December 2009) with the TaylorMade Golf Company (TaylorMade). Pursuant to the agreement he would become the "Global ...