BELGIUM Trends and Developments Contributed by: Sven Demeulemeester, Willem-Alexander Devlies and Daan Buylaert, ATFiELD
Adjustments to tax incentives for sportspeople
ment and professionalisation in governance, which is necessary to build a safe sports and integrity policy. Since 2018, sports federations have been work - ing with the International Centre for Ethics in Sport (ICES) to implement integrity policies and appoint integrity contact points (APIs). In 2021, this policy was further strengthened by a decree requiring all subsidised sports federations to draw up codes of conduct, develop an action protocol and to designate a point of contact for integrity. In addition, federations must have an advisory body that evaluates the integrity policy, have an independent disciplinary system and develop a preventive policy to support athletes and sports clubs in pursuing their own integrity policy. Legislative Developments in Sports Law and Tax-Related Matters Belgium has recently implemented several legis - lative changes affecting sports law and taxation. Expansion of anti-money laundering (AML) regulations to professional football In 2020, Belgium extended its AML legislation to include professional football clubs, agents and the Royal Belgian Football Association. This move aimed to address vulnerabilities in the sport due to financial crimes such as money laundering and fraud. The legislation mandates these entities to adopt internal procedures to ensure AML compliance, including risk assess - ments and customer due diligence. Despite initial implementation challenges, this initiative underscores Belgium’s commitment to enhanc - ing financial integrity within professional football.
Recent tax reforms in 2022 have modified the tax benefits available to sports professionals. • Definition of “young sportsman” the maximum age to qualify as “young sportsman” has been uniformly set at 23 years (previously 26). A transitional period allowed sportsmen aged 23 to 25 at the time of the change to retain their status until they turn 26. This classifica - tion impacts inter alia the applicable tax rate, with young sportspeople taxed at 16.5% on the first bracket of their professional income. • Wage withholding tax exemption – the exemption for clubs from payment of wage withholding tax has decreased from 80% to 75% in 2022. Additionally, the mandatory spending obligation for training young sport - speople has risen from 50% to 55% of the withholding tax. • Deductibility of sports agent fees – Belgian tax law allows for the deduction of profes - sional expenses (such as agent fees) for sportspeople (whether employed or self- employed). For clubs, the deductions for payments to sports agents is capped at 3% of the gross annual remuneration over the duration of the employment contract. This measure aims to discourage excessive remu - neration to sports agents. • Supplementary pension scheme – the option for sports professionals to access their sup - plementary pension from age 35 has been abolished – with a limited transitional measure for existing contracts. Sportspeople are now subject to the same tax provisions as other employees, aligning their pension schemes with general employment standards. • Social security contributions – Belgian legislation provides for significant reduc - tions on the social security contributions for
59
CHAMBERS.COM
Powered by FlippingBook