Taxation of Artistes and Sportsmen in International Tax Law

S. 247“Star Companies” in International Tax Law

Martin Jau

S. 249I. Introduction

1.1 Overview

The use of an enterprise such as a service company personally owned by the artiste or sportsman (a “Star” company; sometimes also called a “Rent-A-Star company”) is a well-known phenomenon with regard to the aim to lower the tax burden of, in particular, artistes and sportsmen who are active internationally. Ever since such companies have been being used for tax planning schemes, their abusive intention has been obvious. However, not all structures are to be characterized as tax evasion; some of them having objective business reasons that could be regarded as legal tax avoidance.

The latest judgment by the England and Wales House of Lords (judgment re Andre Agassi v Robinson) applied the British “look through” approach and decided: “The British tax liability has never been exclusively limited to British subjects and foreigners resident within the jurisdiction, according to Lord Scott of Foscote. (All) Payments made to Agassi Enterprises Inc., a non British (“ = Rent-A-Star”) service company, shall therefore be ...