Free kick for sports stars at tax time

Townsville Bulletin - - NEWS - MICHAEL WARNER

CASHED- UP sports stars have won lu­cra­tive “pub­lic fame” tax breaks worth tens of thou­sands of dol­lars a year.

Ev­ery pro­fes­sional sports per­son will be el­i­gi­ble to cash in on the im­age- rights rul­ing handed down yes­ter­day by the Aus­tralian Tax­a­tion Of­fice.

Sports stars will be al­lowed to di­rect 10 per cent of their play­ing in­come to a pri­vate trust or com­pany, at­tract­ing a tax rate of just 27.5 per cent.

Cricket su­per­stars such as David Warner, Steve Smith and Mitchell Starc earn $ 2 mil­lion for na­tional du­ties alone and could be el­i­gi­ble for wind­falls of about $ 40,000.

But the con­tro­ver­sial deal, back­dated to July 1, is set to ig­nite de­bate about whether the spe­cial deal is jus­ti­fied, given the heavy tax bur­den borne by av­er­age work­ers and the na­tion’s bal­loon­ing debt.

The big­gest earn­ing sport­ing champs pay a top mar­ginal in­come tax rate of 45 per cent, plus a 2 per cent Medi­care levy.

For a $ 1 mil­lion- a- year earner, the ben­e­fit equates to at least $ 19,500.

But elite ath­letes will be el­i­gi­ble to claim even more than 10 per cent on a case- by- case ba­sis. De­tails of the new tax ar­range­ment were pre­sented to agents at an AFL Play­ers’ As­so­ci­a­tion fo­rum in Mel­bourne yes­ter­day.

A state­ment about the tax guide­lines for pro­fes­sional ath­lete salaries was posted on the ATO web­site at 2pm yes­ter­day.

“The ATO will ac­cept that up to 10 per cent of these pay­ments can be treated as refer­able to the use and ex­ploita­tion of the pro­fes­sional sportsper­son’s ‘ pub­lic fame’ or ‘ im­age’ un­der the as­so­ci­ated res­i­dent third- party’s li­cence and are there­fore to be treated as the in­come of the as­so­ci­ated res­i­dent third- party,” the state­ment says.

An ATO spokesman said: “We have re­ceived nu­mer­ous … re­quests from sports­peo­ple ask­ing for ad­vice about the tax treat­ment of pay­ments for the use and ex­ploita­tion of their im­age rights.”

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