Proposition 51K2787

Projet de loi relatif au statut fiscal des sportifs rémunérés.

General information ¶

Authors

CD&V Dirk Claes, Carl Devlies
Ecolo Jean-Marc Nollet
LE Melchior Wathelet
MR Alain Courtois, François-Xavier de Donnea
Open Vld Luk Van Biesen
PS | SP Éric Massin
Vooruit David Geerts

Submission date

Dec. 4, 2006

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

professional sport direct tax tax on income sport

Voting ¶

Voted to adopt

CD&V Vooruit Ecolo LE PS | SP Open Vld N-VA MR VB

Contact form ¶

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Discussion ¶

April 12, 2007 | Plenary session (Chamber of representatives)

Full source

Mr. Devlies and Mr. Courtois are reporters. Do you share the work? Mr. Minister, you have to stay. Without a minister, I can do nothing. Minister Reynders is going to Washington, which will rise this morning. I can do nothing about that either. He is attending the IMF meeting. That the meeting would last until Friday morning was not expected.

Dear colleagues, good morning to all. I have no problem starting a discussion this morning. This happens more. What is strange, however, is that we start this discussion after 15 hours of other discussions, and that an important bill on the tax status of sports practitioners is initiated at 7 a.m. after a 15 hour meeting.

Let me go to my report, Mr. Speaker. This bill, along with two similar bills and a similar resolution, was discussed at the meetings of the Committee on Finance of 14 February 2007 and 13 March 2007, and again after the submission of the report, on 28 March. The bill is also the result of a series of preparatory work of the committee in the years 2005 and 2006, during which the representatives of various sports federations and external experts were heard. Beyond the boundaries of majority and opposition and with the active participation of the Minister and his cabinet staff, on the basis of the information collected, a text was prepared which was submitted by a dozen colleagues from seven different political groups as a bill on 14 December 2006.

The aim was, on the one hand, to provide a sound fiscal framework for paid sports practitioners and, on the other hand, to promote sports youth training. Advice was requested from the Court of Auditors and the Council of State. There were also discussions with the representatives of the three communities. There was consensus on the principle that it is the responsibility of the Communities to determine the conditions to be met for the training of young athletes.

The general discussion did not give rise to major differences in views, except as regards Mr Geerts’s proposal to limit the application of the provisions to football players. Mr Geerts was not followed by the other members of the committee. Also, the proposal of colleague Dirk Claes and myself; to increase the exemption from the deposition of corporate advance tax to 60% if the sports practitioner comes from the youth activity of the club, was not accepted.

Amendments by Chairman de Donnea and colleague Roppe, signed by the majority of the members of the committee, were approved. The amended bill was approved with 8 votes in favor and 2 abstentions. The parties sp.a and Vlaams Belang abstained.

Through the plenary session the bill was returned to the committee. Two new amendments were submitted by the majority, this time not signed by members of the opposition.

Amendment 14 provided for the adjustment of the percentages of article 275, 6° of the Code of Income Taxation, in particular the first paragraph from 50 to 70% and the sixth paragraph from 60 to 80% and from 40 to 60%. Amendment 15 provided for the supplementation of Article 275, 6° with the words "and the payment of wages to these young sports practitioners". The responsibility for this was the following. In addition to the salaries of those engaged in the training, guidance or support of young sports practitioners, the salaries of these young sports practitioners themselves are also considered to be amounts spent on the training of young sports practitioners. This constitutes a fundamental change from the vision developed, among other things, in the resolution. Both amendments were adopted at the committee meeting of 28 March 2007.

As far as the report is concerned, for me. I do not know whether Co-rapporteur Courtois would like to give further explanations to the report.

Following the presentation of your report, I will give the floor to Mr. and Devlies.

I refer to this in my written report.

Mr. Devlies now comes in on behalf of his group, puis M. of Donnea, M. Massin, the gentlemen Van Biesen, Claes and Geerts.

Mr Devlies, you will be given the word for the presentation on behalf of your group.

Mr. Speaker, Mr. Minister, colleagues, this bill is among other things the result of my interpellations of 8 December 2004 and 29 June 2005. Those interpellations had as their object the nefaste influence of the circular of 15 May 2002.

Since that circular of the Minister of Finance, it was possible for foreign footballers and basketball players, later also for volleyball players, active in the national departments, to enjoy a tax advance rate consisting of an exemptive advance tax of 18%. Those foreign players could, in fact, be classified as non-residents by means of that circular fictitiously, although they de facto stayed in Belgium for up to ten months per year. This allowed them to enjoy the favourable regime that previously only applied to artists and sports practitioners who perform only sporadically in Belgium, such as tennis players, following their participation in a tournament in our country.

As a result of the circular, there was a large difference in taxation between a player-inhabitant, who, like every Belgian, has to settle with marginal rates up to 50%, and a player to whom the circular was applied and was taxed as a non-inhabitant. Players and clubs quickly noticed this. Clubs engaged even more foreign players; Belgian players just went to live across the border.

The circular is one of the factors that has contributed to the influx of foreign players, which complicates the flow of Belgian youth players.

We have been eager from the beginning for the withdrawal of the circular and for a unique tax statute for Belgian and foreign players. The draft resolution we submitted on 18 February 2005 proves that. The resolution also calls for the introduction of an exemption from the transfer of corporate advance fee for young players from their own youth activity, analogously to the regime of the exemption of 50% of the transfer of corporate advance fee for postgraduate researchers of universities, colleges and recognised scientific institutions.

In my further presentation, I will distinguish between the version of the bill, which was approved in the Chamber Committee on 13 March, and its current version.

The original bill essentially fulfilled our resolution. It envisaged the abolition of the circular. The foreign footballer, basketball player or volleyball player is therefore subject to a tax regime that is entirely identical to that of the colleague who resides in Belgium. The initial bill also provided for a 50 % exemption from the transfer of corporate advance fee for athletes under 26 years of age, a good translation of the previously submitted proposal for a resolution.

Furthermore, the initial bill also provided for a 50% exemption from the transfer of corporate advance fee for the salaries paid to sports practitioners over the age of twenty-six. In this case, however, half of the exemption had to be spent on the training of young athletes between the ages of twelve and twenty-three.

The initial bill also introduced a separate 33% tariff for arbitrators, trainers, trainers and accompanyers if they earn from another professional activity an income that generates a higher gross taxable income.

Finally, a separate surcharge of 16.5% was introduced on a salary of up to 12.300 euros indexed for the sports practitioner between sixteen and twenty-six years of age.

Through the withdrawal of the circular letter, the introduction of an exemption from the transfer of company advance fee for young players and the measures outlined above, the bill in its initial form gave our clubs an important incentive to invest in young Belgian players and in a sound youth work. They could count on our support.

The initial bill could also count on the unanimous support of the committee members, with the exception of the Vlaams Belang and sp.a. by monde of David Geerts who submitted the so-called amendments 8 to 11 to limit the scope of application to paid footballers.

This amendment was rejected by seven votes against one - one vote of the sp.a -, and two abstentions - spirit and Vlaams Belang. With his amendments, colleague Geerts was without any doubt the spokesman of President Vande Lanotte and basketball club Oostende.

Following the rejection of his amendments, the initial bill was adopted with eight votes for and two abstentions from sp.a and Vlaams Belang.

With the rejection of the amendments of colleague Geerts and the vote in its entirety on 13 March, the suit dropped. On Tuesday, March 20th, however, a new consultation was unexpectedly organized in Round 1 to discuss new amendments. These amendments envisaged an increase in the exemption from transfer of corporate advance fee from 50% to 60% and envisaged that the expenditure of half of the exemption in respect of sports practitioners over the age of twenty-six years also includes the payment of wages of sports practitioners under the age of twenty-three years as expenditure.

At that time, no one was present in our group. The proposed amendments were not in the possession of the employees of Minister Reynders but were distributed through the chairman of the committee de Donnea and discussed very briefly.

Mr Van der Maelen, sp.a. group leader, did not want to comment on its content, according to his own words, because he did not know this dossier sufficiently. However, the sp.a. soon became clear by submitting, on Wednesday 28 March, together with the other majority parties in the committee, amendments 14 and 15, providing for an increase in the exemption from transfer of corporate advance tax to 70%, and not to 60%, as still provided in the amendments discussed in the consultation communicated by Chairman de Donnea, and the authorisation to allow the payment of salaries of young sports practitioners in respect of the expenditure of half of the exemption.

What is present is very extensive. The effective tax pressure on the player salary would circulate between 11 and 15 percent from the club’s point of view. No economic sector has such a favourable regime. As already stated, our proposal for a resolution was inspired by the exemption for postgraduate researchers from universities, colleges or recognised scientific institutions. This is 50%. So now we go a lot further.

The fact that this extremely favourable regime is accompanied by a spending condition that undermines the initial plan to stimulate youth activity goes too far for us. Allowing the payment of salaries of sports practitioners under 23 years of age as the expenditure of half of the exemption from transfer of corporate advance tax on the salary of players over 26 years of age means giving a club an incentive to engage in the recruitment of players rather than in its own youth activity. We cannot find ourselves in this urgently modified spending possibility and wish that the spending condition again takes the form of the original bill. We have submitted Amendment No. 16 on this subject.

Finally, I think some uncertainties need to be clarified. What is to be understood in Article 2(a) as occupational income from another occupational activity? Does the professional income referred to in Article 23 § 1 of the Income Tax Code concern? This article provides a not entirely equal definition. In Article 23, § 1, professional income is defined as income derived directly or indirectly from activities of all kinds. Specifically, it refers to profits and benefits, profits and benefits from a previous professional activity, salaries, interest and subsidies as such. This definition is thus wider than that used in Article 2(a). It remains unclear how the tax regime proposed in Article 2(a) relates to the existing scheme in which players, coaches and staff can receive a non-taxable remuneration of EUR 12.5 per match and a higher awarded remuneration fully taxable as salary. I refer to the circulars of 14 June 1991 and 7 April 1998. Second, the existing regime for arbitrators in which the fees are tax-free provided that it is proven that the performance is non-profit, represents a refund of actual costs and the activity is merely a leisure spending. Third, the existing regime for players and trainers who do not practice their sport as mere leisure, such as players and trainers of the first team, where the remuneration must be entered in its entirety on a payroll 28110 but where the exemption regime of the remuneration for volunteer work applies. If the limit is not met, the remuneration shall be taxable in its entirety, unless a double proof is provided that the remuneration is intended to cover costs owned by the club and has actually been spent on such costs.

Are the aforementioned exemption schemes still in place? If the aforementioned limits are not met, will there now be a separate tax at 33% instead of the current global tax, or will the existing exemption schemes be abandoned?

The same applies to the fees of auditors and cashers, the circular of 12 August 1996, and the stewards, the circular of 12 August 1996. Do they fall under the concept of accompanying person in Article 2(a)?

Is it true that there is a lapsus in the text of Article 2 so that an athlete can enjoy the two special rates? Article 2(a) refers to having reached the age of 26 years of age on 1 January of the accrual year. Article 2 (b) refers to being under 26 years of age on 1 January of the taxable period. An athlete who becomes 26 during the taxable period meets both conditions.

Will the corporate advance tax rates be adjusted to the new separate rates of 16,5% and 33%? If this is not done and the club does not assume the lower rates, does not the risk of the club acquiring an unlawful advantage by not breaking through half of the corporate premium threaten?

I had assumed that Minister Reynders, who knows these matters well and can immediately answer those questions, would be here. I had hoped that Minister Reynders would be able to get an answer on these small points so that the text was completely clear and an interpretation was immediately given by the Minister. Mr. Minister Dewael, we will now see if you can do this eventually for Minister Reynders.

Minister Reynders is in Washington for the Monetary Fund from this morning.

In any case, it will be difficult to answer. I had assumed that Minister Reynders would be here for such an important bill.

The word is to Mr. De Donnea.

I will try to be brief and not to exceed three quarters of an hour. Mr. Speaker, dear colleagues, the vote on the bill we are discussing will crown some two years of work in the Finance Committee on the tax status of professional or paid athletes. It was in fact on 15 June 2005 that our commission began the hearings of representatives of various professional federations on this important issue, both for the fairness of taxation applicable to paid athletes, professional or not, and for the promotion of amateur and professional sport practiced by young people or younger people residing in Belgium.

Several working meetings followed the hearings of 15 June in the Finance Committee in the presence of the Minister of Finance whose services gave us a strong hand. Majority and opposition decided to unite their efforts to lead to a common project – this is worth emphasizing. On December 4, 2006, Mr. Devlies, Geerts, Van Biesen, Claes, Massin, Wathelet, Courtois, Nollet and your servant were able to file the bill we are discussing this morning.

This proposal pursues four main objectives. First, encourage athletes and volunteers receiving supplementary income as such. For this purpose, the proposal provides for separate taxation at a rate of 33% on the professional income paid or allocated to athletes aged at least 26 years, to arbitrators of sports competitions for their arbitration services, to trainers, coaches and escorts for their activities of training, guidance or supporting athletes, provided that they receive from other professional activities professional income that reach gross taxable amounts higher than the total amount of income received from their sport, arbitrator, coach, coach or accompanying activity.

One of the positive aspects of this measure, in addition to the tax interest it presents for the persons concerned, is to avoid certain tax deviations and the existence of gray zones in the taxation of remunerated amateur sport.

The second objective is to encourage the practice of sport by young people aged 16 to 25 through a separate taxation for young athletes. Thus, young athletes between 16 and 25 years of age will be taxed separately at 16.5% the remuneration paid or allocated for the income section that does not exceed a maximum amount of 12.300 euros per year. We considered that the net remuneration of young athletes should take into account the need to help them make up reserves to be used on the day when they should turn to a non-sports career.

The third objective – Mr. Devlies has long referred to it – it aims to eliminate any discrimination between resident and non-resident athletes earning income for a period of more than 30 days a year.

The existing discrimination – I will not give a new description because Mr. Devlies did this very well during the presentation of his report – it encouraged our athletes to expatriate and provoked an invasion of non-resident athletes in some clubs and, in particular, in the first division clubs. The elimination of the above-mentioned discrimination should encourage the arrival in the first division of a greater number of young athletes trained in Belgium.

The fourth and final goal is to encourage clubs to invest in the training of young athletes.

I also refer to this report. It is, in any case, quite positive that clubs receive an exemption from the payment of the professional prepayment of 70% on the basis of the professional prepayment due on, on the one hand, the remuneration paid or awarded to athletes under 26 years of age and, on the other hand, the remuneration of athletes at least 26 years of age, provided that they allocate, within a certain period, half of this exemption from the payment of the professional prepayment to the training of young amateur athletes and to the payment of their salary. When I say “young” I mean young people who are in the age range between 12 and 23 years.

In conclusion, I will say, Mr. Speaker, that this is an important bill for the promotion of sport in our country, but also for the fairness and transparency of the tax regime applicable not only to athletes, but also to arbitrators, accompanyers and trainers.

This bill – I would like to repeat it – eliminates the discrimination between resident and non-resident athletes in tax terms and should therefore encourage the recruitment, by Belgian sports clubs, of resident athletes. It sets a more advantageous fiscal framework for referees, trainers, coaches and accompanyers. This should prevent certain tax deviations. It also encourages clubs to invest more in the training of young athletes. Finally, it introduces, for athletes aged 16 to 26 years, a tax regime that should help them reintegrate more easily into the non-sports life after their sporting career.

I thank you for your attention.

Mr. Speaker, I am going to stretch my sleeves. Whenever I give an hour’s presentation, I will do it.

Colleagues, as you have already heard in the committee, I have limited my comments mainly to football, but I think the principles in the draft that is being voted today apply to different sports.

What are those Principles? First, the equalization of foreign players and the players with Belgian nationality. Second, stimulating the preparation of young people. Third, better guidance of young people and professionalization of youth education. Fourth, do all this with a budgetarily neutral character for the government and without negative consequences for the clubs to not jeopardize their viability. We will approve this bill.

The word is yielded to Mr. Wathelet.

Mr. Speaker, I will obviously not be too long given that my previous colleagues highlighted the interesting elements of the proposal. I will, like my colleague from Donnea, reiterate the four essential elements.

First, the equality between Belgian and foreign athletes. It was completely unacceptable that, for a salary equal to the level of the athlete, it would cost a football club, basketball club or any other sport more to hire a Belgian athlete than a foreign athlete.

Of course, we are not asking to favor Belgian players. It would be forbidden in the light of the Treaty of the European Union but therefore to treat our nationals less favourably while Belgium is ⁇ full of sports talents and to deprive itself of being able to use all our Belgian athletes at the level of Belgian sport, it was unacceptable. This recovered equality is not at all the favoritism granted to Belgian athletes but, I repeat, a simple equality that should always have existed. I think this change is quite positive.

Second, the support of young athletes with 16.5%. This measure is also excellent.

Third, the investment in education. It is true that the reduction of the pre-account is reduced to 70%. This means that these are huge amounts, larger than in other sectors. This choice must be taken. The important thing is that this money is invested in training. If one of the guidelines of this proposal deserves to be emphasized, it is the training, the valorisation of what exists in Belgium.

While some athletes earn miraculous amounts, there are also people who find it difficult to live their professional sports career. These are the people we need to support by a more favourable tax treatment but also by allocating a portion of the reduction in the pre-count to training that is essential to enable our future generations to grow.

Fourth, the proposal also does not forget an important part of the sports world. It’s not about the athletes, but about all those people who allow the sport to exist. I think of the referees, the people who work in all clubs, whatever they are, who give their time to the clubs. A tax status was planned at 33%.

In conclusion, it is known that sport fills the lives of many of us, whether as an actor or spectator. We all have in our families people who spend their day in sports. It was important to create this equality, to invest in training, to promote young people who start a sport and to value all those people who allow the sport to exist day by day.

I will not repeat the various positive aspects of this bill. I think we can say with all honour and conscience that here, together with the various groups, we have delivered a nice piece of parliamentary work. What has not yet been discussed is the very positive cooperation of the Minister, who, unfortunately, is not present here today. He, together with his services, has supported and drafted this bill 100%. I think it is important to emphasize this in this half-course.

It is a little regrettable that such a bill, which has grown from the different factions, which has the support of the different factions, which ultimately aims to release more resources for youth work and which also aims to equalize between non-residents and residents as sports practitioners, today must be treated in such a way and in a drafte. Parliamentary work has been done very well and there have been consultations between the various parliamentary groups. We will support this bill 100%.

I will also be brief. However, I would like to use this circumstance to mention two or three points in this assembly. It seems to me that it is time to put back the points on the "i" in sports.

First, without going back to the details that will be voted just now, I remind you that it is important to find a certain balance between professionals, amateurs, and that these incomprehensible discriminations between foreign and Belgian professional players are avoided.

Above all, this proposal is interesting in so far as it touches the “grey zone”. I mean talking about this area that nobody could precisely define: referees, escorts, youth coaches, some paid amateur players - in football, basketball, volleyball, hockey, etc. These are all those people who receive remuneration, but no one knew exactly how they were taxed.

This law will finally help clarify the situation of hundreds of thousands of people who did not know themselves what they had to pay to the tax.

Finally, you think that there is a recognition of the sport. Albert Camus said, “De toutes les choses peu importantes, le sport est la plus importante.” What matters to the souligner here is to recognize the role of the largest social movement in the country. The largest social movement in the country.

When I speak of the country’s largest social movement, I want to emphasize that. It is the largest social movement in the country. More than 1 million people are engaged in sports, directly or indirectly.

They are players, accompanyers, coaches, or even volunteers.

You remember my remarks during the vote on the law on the status of volunteers. As a coincidence, the volunteers of the sport had been forgotten.

It is about more than 600,000 people who are constantly engaged in sports in Belgium, weekly, every weekend.

I could not admit that we are forgetting those hundreds of thousands of people who, day by day, allow young people to practice sport and thus have another activity.

Dear colleagues, before leaving, I just wanted to remind here of one essential thing: sport is one of the most important phenomena in the country in terms of social and cultural integration. Economically, sports are millions of euros that are spent every weekend and that make our ⁇ run. It is an extremely simple way to prevent young people from falling into troubles you know better than me and to attract them to the effort, the notion of risk and independence but also of self-donation.

It is also a way to attract young people to a better diet and better behavior in general. In the next ten years, we will have to deal with the fight against obesity. If, today, the struggle for the environment is an essential political data in all the programs that will be developed, I find that the struggle against obesity will be the same struggle in the next ten years because nobody, today, sees the importance of fighting for young people, not only in their daily sports but also in their daily dietetics.

Finally, let us never forget that sports allows a certain amount of spending every weekend that makes the economy and tax turn. It also provides a number of essential values for young people in our country.

A law that allows today to put all athletes in this kingdom on an equal foothold and avoid the grey zone for hundreds of thousands of people is a good thing but a law that will allow tomorrow young people to finally find themselves worthy in equally worthy sports infrastructure is a very good thing for this country. That is why we must congratulate ourselves that all parties and the Minister of Finance felt the right time to come up with this proposal which, in the end, only confirms that sport is essential for health.

Mr Courtois, I thank you. It is warm to the heart!

Mr. Speaker, colleagues, first and foremost, I would like to thank everyone who has collaborated on this bill, in particular the chairman of the committee, who has led it into good work, all colleagues and the minister and his services who have also done a perfect job.

I think the starting point was very good. I will only come to explain a brief amendment in which I address myself primarily to the colleagues of the sp.a, and more specifically to colleague Geerts. After all, I think that somewhere a small dispersion happened, not intended and ⁇ still to be corrected. It is only my intention to explain this briefly. I will try to describe it briefly and clearly. We need to consider taking that extra step.

What is the problem? For professional athletes, 70% of the corporate premium is withheld in this bill. Thus, 30% of the corporate advance tax becomes the tax burden. People who are involved in the sport and who, according to Mr. Courtois, are so important – we think of referees, trainers, trainers, guides; those who are really needed to make the youth engage in sport – pay 33% taxes on the income they get from sport. This income is not counted with their other income.

What are we doing now? We need to think about this, especially Dirk Van der Maelen. In fact, we are going to let those 300 trial soccer players only bear a tax burden of 30% while all the rest, all those who come to help, must pay 33%, which is 3% more. That could not be the intention, right? Was this not originally intended? Why have we come to this? Initially, an exemption of 50% on the corporate advance tax was assumed. This percentage has grown to 60 and eventually even 70%. Those 33% were not taken into account.

What is our proposal now? We ask that for those trainers, escorts, referees and trainers – we estimate that it is a small 100,000 people – a tax exemption of 2,000 euros is introduced, not indexed. This is approximately equivalent to 2,500 euros. This means that the coach would receive 250 euros per month because in July and August there is normally no football. Therefore, we would grant an exemption for 250 euros per month and only afterwards they fall back to that 33%. We are not going to turn to those 33% or the 16% for young players. It is not about the athletes themselves, but about the accompanyers and the referees. They alone could benefit from an exemption of 250 euros per month, a total of 2,500 euros not indexed.

I would like to hear from the gentlemen Courtois, Geerts or Van der Maelen what they think about this. Can they support this proposal? I think that would only be an improvement of the current proposal.

The competent minister is not present. No one can do anything about that, Mr. Claes, you know. You don’t know M. Courtois wants to react on that? I must also say that there must be a second reading if one wants to accept this amendment.

I do not support the vote on this amendment.

Mr. Speaker, it is interesting to look at it, but, in my opinion, today is not the time to vote on it today. Let us first vote on this text and then examine who can sit here and the next legislature, the point.

I agree with Mr. Mr. and Geerts. Indeed, this is not the time, given the very long discussions we have had, to introduce an additional amendment. In my opinion, it is better to let the law come into force on 1 January 2008. After a year of practice, it will be possible to re-examine whether or not to vote on one or the other amendment of the kind that Mr. proposes. by Claes. Today, it is important to vote on the draft for the reasons everyone has invoked and wait for the evaluation to determine whether one or the other amendment is still necessary.

Mr. Chairman of the committee, I agree with this, but it would have been better for you to do so with the amendments of sp.a and also to wait for the annual evaluation. In that case, we would not have submitted the amendment.

The amendment only aims to prevent professional football players from being treated better than athletes who, poorly, want to earn something by training or accompanying a youth club.

This is a regrettable matter.

Mr Claes, whether you hold the amendment or not, is your matter. If you tell me later that you will withdraw the amendment, you can. I don’t want to go anywhere on the road, but you can decide for yourself.