New case law offers opportunities for Belgian entertainers and sportspersons


In a judgement of 25 January 2018, the Belgian Court of Cassation confirmed that Belgium cannot tax income of a sportsperson residing in Belgium derived from activities exercised abroad. The Court explicitly confirms that the fact that this income is already exempt abroad does not relieve Belgium from its obligation to exempt under the applicable double tax treaty.

The case before the Court concerned a professional cyclist residing in Belgium, but performing his activities (cycling contests) in various other countries. For these activities, he receives a fixed annual income from his team. The discussion by the Court (in confirmation of the judgement of the Court of Appeal of Ghent of 27 October 2015) gives an interesting insight in the Belgian interpretation of various aspects relevant for entertainers and sportspersons considering taking up residence in Belgium.

Question 1: Can employed entertainers and sportspersons fall under the scope of article 17 OECD MC?

Article 17 of the OECD MC has specific provisions for entertainers and sportspersons, attributing taxing rights to the state wherein they perform their (public) activity. In an OECD report of 26 June 2014 it was initially suggested that article 17 should not apply to entertainers who are employed, although eventually is was concluded that it would be inappropriate to exclude employees of sports teams.

Even though the discussion was not raised by the tax administration, the Court of Appeal of Ghent commences its argumentation by confirming that article 17 does also apply for entertainers and sportspersons who are employed.

Question 2: What percentage of the income may be attributed to the (exempt) activities abroad?

Once it was established that the remuneration of the cyclist fell under article 17 of the OECD MC, the discussion moved to the attribution of the income between the different states. The taxpayer claimed that only contests and group trainings (abroad compared to those in Belgium) were relevant. The tax administration based itself on the contests and group trainings abroad compared to a total estimated working year.

Example: A sportsperson participates in contests and group training on 100 days, of which 45 in Belgium and 55 abroad. The remaining 120 days, based on an estimated 220 working days per year, are not accounted for (presumably personal training). According to the taxpayer, 55% (55/100) of the income would fall under the scope of article 17 and only 45% (45/100) may be taxed in Belgium. According to the tax administration, only 25% (55/220) would be covered by article 17 and 75% (165/220) may be taxed in Belgium.

The fixed remuneration received by the cyclist is directly related to his sports activities, i.e. participating in cycling contests. Indeed, it are these cycling contests that allow the employer to achieve its goal of generating publicity for its sponsors. Regardless of the outcome of the race for the specific cyclist, he can assist in the team effort of making the sponsors visible to the public. Even personal training of the cyclist, without any publicity, contributes to achieving this goal.

As the Court of Appeal thus establishes that the remuneration was paid with the purpose of participating in contests, it is stated that any (personal) training is merely preparation for said contests and should not be taken into account.

Question 3: Is Belgium obliged to allow double non-taxation of Dutch income under article 17 OECD MC?

The main point of contention by the tax administration before the Court of Cassation concerned the application of article 17 for the activities performed in the Netherlands. This is because the Netherlands has unilaterally removed the taxation of non-resident performers in 2007. However the Double Taxation Convention between Belgium and the Netherlands of 5 June 2001 still contains an article 17. This led to the situation whereby the taxpayer was not effectively taxed in the Netherlands, but would still claim treaty exemption in Belgium.

The Belgian tax administration invoked the specific text of the method article in the Belgium-Netherlands DTC, which only required Belgium to exempt income insofar it was ‘taxed’ (as opposed to ‘taxable’) in the Netherlands. Due to the exemption in the Netherlands, the tax administration argued, the income is not ‘taxed’ and thus Belgium does not have a duty to exempt.

The Court of Cassation refutes this argument, stating the method article does not entitle Belgium taxing rights on income not effectively taxed in the Netherlands, thus confirming double non-taxation.


The confirmation of the double non-taxation in the judgement of 25 January 2018 is not only useful for sportspersons deriving income from the Netherlands. On the one hand, also other types of taxpayers deriving income from the Netherlands can obtain the same benefits, for example Belgian residents receiving a ‘pension in own management’ (‘pensioen in eigen beheer’) could potentially claim for a Belgium exemption. On the other hand, other treaties, most importantly the Double Taxation Convention between Belgium and Hong Kong of 10 December 2003, share a similar interpretation. Due to the judgement, a broader Belgian exemption may potentially be expected. However, the tax administration opposes this judgement in the ministerial circular 2018/C/94 d.d. 20 juli 2018.

Aside from the legal discussion on the treaty exemption, the judgement (of Court of Appeal of Ghent) also shows a very advantageous calculation of the attribution of income under article 17. It could even be argued that insofar no contests take place in Belgium, the sportsperson or entertainer would benefit a full exemption from Belgian taxation, regardless of days spent (practicing/preparing) in Belgium. Thus it is becomes apparent that despite high nominal tax rates, Belgium can be an attractive destination for entertainers and sportspersons!

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