Netherlands Court of Appeals have decided in three cases on the application of tax treaty provisions such as Article 17 of the OECD Model Convention on the basic salaries of professional sportsmen. The first two decision were taken by the Court of Appeal of ?s-Hertogenbosch, and concerned a professional cyclist (decision of 10 June 2003, No. 01/03822) and a professional football player (apparently a player of Feyenoord, decision of 5 November 2003, No. 02/04607). The Court held that applicable tax treaty provisions that were similar to Article 17 of the OECD Model Convention were indeed applicable to the basic salary of the professional sportsmen. The strongest argument appears to have been reference to paragraphs 1 and 2 of the 1963 OECD Commentary and paragraph 8 of the 1992 OECD Commentary. The Netherlands tax authorities went into appeal against both these decisions.
Almost one year later the Court of Appeal of Amsterdam also had to decide whether tax treaty provisions such as Article 17 of the OECD Model Convention were applicable to the basic salary of a professional sportsman (in this case a professional ice-skater, decision of 6 October 2004, No. 03/4112). The Amsterdam Court of Appeal held that these tax treaty provisions were not applicable to the basic salary. The main argument now appears to have been paragraph 9 of the 1992 OECD Commentary. In this case the taxpayer went into appeal. The Netherlands Supreme Court will thus have the opportunity to decide this quite fundamental question.
We are considering preparing and publishing – in an international tax journal – a comparative study on the application of tax treaties to the basic salary in the various countries. We would be very interested to learn whether there has been case law in your country on this issue. Please send any reaction you may have to firstname.lastname@example.org.