Page 54 - Focus Group

VAT ON SPORTS PERSONS

Sports players earn their livelihood from sports standard rate.
through a diverse range of income sources and
depending on the nature of the income received Signing fees
by them, different tax rules will be applied. The tax Signing fee is paid to a player when signing up an
treatment will also depend on whether players are agreement with a club. Any signing fees paid to a
employed by clubs or are considered independent player who is employed by a club shall not attract
contractors. The aim of this article is to explain the any VAT since such fees are paid as remuneration.
VAT consequences for professional sports players in However, any signing fees paid to self-employed
the UAE. player, or to the player’s agent for securing the
services of the player will attract VAT at standard
Player remuneration
rate.
Sports players who are recruited on an employment
contract will normally be employees of the club and Image Rights
remuneration earned by them will not be subject Sports players generally enjoy the income from
to VAT, However, non-contract sports players commercial opportunities such as image licensing
(for instance golf or tennis players generally) are agreements, endorsements and appearance fees
not employees of a club but are considered self- which involve commercial exploitation of a player’s
employed and hence match fees charged by image such as the use of his name, photograph,
such players is taxable supply and attracts VAT at voice, signature etc.

54 TAX JOURNAL 2020 The Institute of Chartered Accountants of India (Dubai) Chapter NPIO