Czech Tax Heaven for Sportsmen

In Ewa Lotko, Urzula K. Zawadska-Pak, Michal Radvan. Optimization of Organization and Legal Solutions concerning Public Revenues and Expenditures in Public Interest: Conference Proceedings, ISBN 978–83–65696–08–3, 2018

26 Pages Posted: 7 Nov 2018

See all articles by Michal Radvan

Michal Radvan

Masaryk University, Faculty of Law

Multiple version iconThere are 2 versions of this paper

Date Written: October 15, 2018

Abstract

There is no specific legal regulation of professional athletes in the Czech Republic. In practice, both individual players and team players are mostly self-employment. In case of team players, compared to the legal regulation in other European countries, it is quite unique. This article deals with the legal regulation of professional team players, especially in the area of taxation. It works with the hypothesis, stated in two judgments of the Supreme Administrative Court, that team players should tax their incomes by the personal incomes tax as self-employed persons, i.e. businessmen. In 2011, the Supreme Administrative Court stated that team players are not employees of their club and they should pay taxes as from independent activities. The Czech Financial Administration followed this decision and taxed these sportsmen as so called independent professions. The reason why this issue was reopened by the Supreme Administrative Court was the case of football player David Lafata, who got a business license (he became a businessman) as a footballer and claimed that playing football is not an independent profession, but real business. In both cases, the personal income tax base is created as the difference between income and expenditure. As mostly there are no real high expenditures, Czech legal regulation allows the lump sum expenses: in case of independent profession 40 %, but for business (in this very case) 60 %. The aim of the paper is to confirm or disprove the hypothesis stated above, analyzing existing legal regulation and case law, and offer solutions de lege ferenda.

Keywords: tax; tax law; personal income tax; sportsman

JEL Classification: K34

Suggested Citation

Radvan, Michal, Czech Tax Heaven for Sportsmen (October 15, 2018). In Ewa Lotko, Urzula K. Zawadska-Pak, Michal Radvan. Optimization of Organization and Legal Solutions concerning Public Revenues and Expenditures in Public Interest: Conference Proceedings, ISBN 978–83–65696–08–3, 2018. Available at SSRN: https://ssrn.com/abstract=3266848

Michal Radvan (Contact Author)

Masaryk University, Faculty of Law ( email )

Veveri 70
Brno, 61180
Czech Republic

HOME PAGE: http://www.law.muni.cz

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