On 2 February 2016, the tax administration published a new tax circular dated 2 December 2015. This circular is intended to complete a 2012 circular on the taxation of athletes who are Belgian tax resident, work for a Belgian employer in an employee relationship and participate in sports events in Belgium and abroad.
The old circular already set out the guidelines to be followed regarding athletes who earn professional income in a cross-border context. The tax authorities have stated that the Belgian approach corresponds to the OECD approach, since most Belgian tax treaties generally follow Article 17 (§1) of the OECD Model.
The new circular is drafted using the same approach and confirms that the Belgian tax authorities apply the OECD Model Commentary of 2014. This new commentary contains certain new positions and clarifications compared to its previous version.
Amongst other issues discussed, the 2014 Commentary provides guidelines regarding how to allocate income relating to days spent abroad. Given that in Belgium there has been some case law in recent years on the issue (for example, for professional cyclists), it is useful to know that the tax administration accepts the following pro rata allocation: training days and preparation days for competitions and games will be qualified as working days, and the income that relates to these days spent abroad will be allocated to the state where the athlete has spent these days.
Thus, athletes are advised to keep a detailed agenda so they can make the appropriate pro rata calculation. In case this information is not complete or insufficiently detailed, the tax authorities will use a lump sum number of 220 working days per year.
If you would require more information about this topic, then please contact:
Brigitte LIEVENS – Counsel (brigitte.lievens@tiberghien.com)