Exemption from advance payment of withholding tax for the sports world: less advantageous in 2022!

On 1 January 2022, the amount of the exemption from advance payment of withholding tax applicable to the remuneration of sportspersons was reduced to 75% of the withholding tax retained. If the sportsperson is at least 26 years old, 55% of the amount of this exemption must be spent on the training of young sportspersons.

Reminder

The persons liable for the withholding tax who pay or award remuneration to sportspersons may be exempted from paying part of that withholding tax to the Treasury. 

Where the exemption applies to the remuneration of sportspersons who have reached the age of 26 on 1 January of the year following the year in which the exemption is applied for, part of that exemption must be spent on the training of young sportspersons.

In order to obtain the exemption from advance payment of withholding tax, the regulations provide for certain formalities (declarations 274, nominal lists, proof that the sportspersons meet the conditions throughout the period covered by the exemption and that the amounts were actually spent on the training of young sportspersons, etc.).

From 80 to 75%

As of 1 January 2022, the amount of the exemption was reduced from 80 to 75%. Thus, the persons liable for the withholding tax who pay or award remuneration to sportspersons may obtain a partial exemption from the advance payment of withholding tax of 75% of the amount of the said withholding tax. Remuneration is only taken into consideration for the exemption to the extent that, during the period to which the exemption relates, the sportspersons to whom such remuneration was paid provided sports services for the person liable for the withholding tax.

Additional condition for sportspersons aged 26

When the exemption applies to the remuneration of sportspersons who have reached the age of 26, 55% (instead of 50% until 31 December 2021) of this exemption must be spent on the training of young sportspersons who have not yet reached the age of 23. Age requirements are verified on 1 January of the year following the year in which the exemption is applied for. This spending obligation must meet certain conditions and must occur no later than 31 December of the year following the year in which the exemption has been applied for. On the expiry of this term, the unspent amounts must be paid to the Treasury, plus interest on arrears.

In summary, two changes

As of 1 January 2022:

• The amount of the exemption is 75% (instead of 80%) of the withholding tax;
• The obligation to spend amounts is increased to 55% (instead of 50%) of the amount of the exemption.

Source: Programme Law of 27 December 2021, Belgian Official Gazette of  31 December 2021.