The fact that Belgian athletes who have won prize money at the Olympic Games may be taxed because of this is criticized. Finance Minister Vincent van Bettieghem says he is working on a “sustainable solution”.
At Le Soir, it was announced on Tuesday that prize money for athletes who earned a medal or eighth place in Tokyo may be subject to the Belgian tax system. Twenty-six Belgian athletes finished in the top eight, with seven of them winning a medal.
Since Japan has decided not to tax the €571,500 of the prize money that was paid for it, the money is automatically taxed in Belgium. In the two previous Olympics, Belgium agreed to “double taxation” with the organizing nations Brazil and the United Kingdom. This means that the host countries impose a 0 percent source tax on the prize money, so that the athletes are not taxed in our country anymore. The possibility of a tax levy is now criticized.
Scientists and artists
“I understand the fact that the exceptional performance of citizens is an important sign for our country,” Finance Minister Vincent van Bettieghem (CD&V) said on Tuesday. But the tax exemption on premiums or prize money should not be decided arbitrarily. It would be inappropriate for the Secretary of the Treasury to decide with his thumbs up or down which achievements of athletes, authors, filmmakers, or scientists are exceptional enough for an exemption.
However, such an exemption already exists for scholars and artists, notes tax expert Michel Moss. “These are bonuses for exceptional achievements, such as winning a Nobel Prize or the Queen Elizabeth competition,” says Maus. These profit premiums are tax deductible. Politicians can decide to add Olympic bonuses to this exception.
Van Bettieghem has not yet shown his cards. He says he is working on a “legal framework for taxing prize money that citizens earn through exceptional performance”. This should provide clarification about which premiums are taxable and which are not. “The tax authorities certainly do not target Olympic athletes’ earnings bonuses with a separate tax, but they are striving for a sustainable solution rather than a one-off reform,” says van Peteghem.
Whoever wins the gold medal in the games gets 50,000 euros. For silver it was 30 thousand euros and for bronze it was 20 thousand. The team players received 12,500 euros for a gold medal. A place in the top eight could result in up to 5,000 euros. Coaches received about 25 percent of the premiums brought in by their athletes. In any case, the tax authorities will tax the premiums so as not to set a precedent.
Personal income tax in our country has progressive rates, but age also plays a role for athletes. There has been a separate scheme for athletes since the 1990s. Those over the age of 26 pay 33 percent in taxes in the first tranche of €20,360 in income, and those under 26 pay 16.5 percent in the first tranche.
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