Garrigues, Taxand Spain, addresses several key tax topics related to the world of sport in their latest newsletter. Included is an article on the ruling on withholding tax applicable to salary income paid to professional indoor football players.
The DGT makes a distinction according to whether the employment relationship falls inside or outside the scope of the special employment relationship for professional athletes under Royal Decree 1006/1985:
If there is a special employment relationship between the requesting party and the athletes, withholding tax must be deducted under the general procedure in article 82 of the Personal Income Tax Regulations and having regard to the 15% minimum withholding rate
Otherwise, withholding tax also has to be deducted under the general procedure in article 82 of the Personal Income Tax Regulations, though in this case the minimum 15% rate will not be applicable, instead the limit on amount determining whether the employer is exempted from the obligation to withhold tax (article 81 of the Personal Income Tax Regulations) and the 2% minimum rate where they are contracts or relationships for terms shorter than a year (article 86.2 of the same regulations)
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Taxand's Take
The request concerned the withholding tax that must be deducted by the requesting institution, a sports institution engaged in indoor football, to the salary income it pays to professional players.
