Czech Tax Heaven for Sportsmen

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 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. businesspersons. 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 the Supreme Administrative Court reopened this issue was the case of football player David Lafata, who got a business license (he became a businessperson) as a footballer and claimed that playing football is not an independent profession, but real business. The aim of the paper is to confirm or disprove the hypothesis stated above, analyzing existing legal regulation and case law, and it offers solutions de lege ferenda.