An agreement under which a sportsman under the age of majority is obliged to share part of his future income once he becomes a professional athlete may be in breach of the Directive on unfair terms in consumer contracts. The European Court of Justice held, that the national court must assess the unfairness of such a term by considering whether a legal clause to that effect is plain and intelligible as regards the financial consequences of the commitment.
In a recent ruling, the Supreme Tax Court decided that payments made by the German Sports Aid Foundation (Stiftung Deutsche Sporthilfe) to an athlete constitute business income of the athlete and thus is not only subject to income tax but also trade tax.
The Supreme Tax Court has held that a payment to an Austrian agency for the right to broadcast sporting events is not subject to withholding tax as a payment to the athlete(s) appearing.
The finance ministry has published an extensive decree on the procedures to be followed when accounting for withholding taxes on the fees paid to non-resident artists, athletes, actors and entertainers.
