The tax treatment of image rights of professional sports persons in South Africa

Abstract

The tax treatment of image rights has been thrust into the spotlight by the recent tax controversies involving high profile professional footballers in Spain (Badcock: 2017). The discussion has gathered pace in South Africa due to the release of the latest version of the South African Revenue Service Draft Guide on the Taxation of Professional Sports Clubs and Players (2016). This research report examines and compares South Africa's approach to the tax treatment of image rights in terms of South African legislation and case law with selected other countries, being the United Kingdom and the United States of America. A critical analysis shows that South Africa's lack of specific legislation relating to image rights may be the reason for the approach taken by the South African Revenue Service. The report further examines whether South Africa has failed to implement international best practices and concludes with recommendations for an alternative approach going forward.