In recent decades, professional sports have become an international field, where athletes compete and play in clubs all over the world regardless of their nationality. Israeli athletes, like athletes from all countries of the world, focused not only on the sports field but also on the tax obligations that vary from country to country.

The period of activity of the athletes and their high profits is a relatively short period and should be planned, this is so that they can economize their steps for the future, and leave suitable investments, therefore one should invest in comprehensive planning.

income tax

The rule of thumb is that income from the maximum salary earned abroad is attributed to tax in the country where it was earned, although there are exceptions according to the treaty agreements for the prevention of double taxation between countries.

Israeli athletes who work abroad should know that they are obligated to report all their income in Israel, whether they earned it in Israel or abroad. Income tax in Israel may collect if the tax paid abroad was lower than the Israeli tax rate.

As long as they are considered residents of Israel. The tax paid abroad is considered as if it had been paid in Israel – with no refund of the excess.

This is in addition to the report they submit in the country where they operate.

Taxation of scholarships and awards

Many athletes earn part of their income from winning competitions and receiving awards. The taxation laws of the country where the prizes were awarded should be checked, because it is possible that these prizes will also be taxed.

scholarships

Scholarships that athletes receive sometimes come with the purpose of easing the expenses incurred during their sports activities. Assuming that the scholarship does not exceed the total expenses really generated by the sports activity, it can be assumed that it will not be taxed. If there is no such adjustment, then it may be taxed. It depends on the taxation laws of the relevant country.
awards

Prizes from sports competitions are taxed in most cases, and are usually marked as ordinary income. In Israel, for example, income from winning a prize in a sports competition is subject to tax. The exception is if the prize is given not for the purpose of enriching the winner but to recognize his contribution to the sport, in which case the prize may not be taxed. Again, this depends on the tax laws of the relevant country.
It should be noted that in some cases, the country where the scholarship or prize was awarded will deduct local tax from the amount even before the athlete receives it. For example, in the United States, scholarships and awards are subject to tax at a rate of up to 30% depending on the type of income.

Advanced taxation plans

Sometimes, athletes can use advanced tax schemes to minimize resources. This can include activity through limited liability companies, accounts abroad, and complex international taxation systems. Professional legal advice is required to understand the possibilities and obligations in this context.

The rule of thumb is that Israeli athletes who work abroad are required to maintain complete transparency regarding their income and assets, and to understand their tax obligations in the country where they work as well as in Israel. It is always recommended to understand the tax laws of the country in which you work and to obtain appropriate legal advice.

With professional advice, athletes can reduce their tax burden, improve their tax strategy and ensure they comply with all necessary legal requirements. It should be remembered that everyone’s taxation situation is unique, so it is recommended to check the situation with a qualified expert.

We specialize in the field of taxation of athletes and respond to all your professional requirements. With our expertise, we help athletes maximize the longevity of their income, reduce the cost of taxes and ensure that every legal requirement is met.

We offer a variety of services, including consulting on taxation issues, optimal taxation planning, support in submitting tax reports and more. If you are looking for professional taxation solutions for athletes.

I understand the importance of the uniqueness of athletes’ needs, and offer years of expertise in the entire professional field of athlete taxation. Our professional experience includes serving a diverse and wide list of athletes, whom I accompany and provide them with my insights in the field of taxation.

My knowledge allows athletes to feel comfortable and confident, and allows them to focus on what they excel at – the sport. My goal is to ensure that they receive the professional tax support they need.

This is an opportunity for me to derive a significant advantage from the experience I have gained, which allows me to support the financial training of the athletes and make it easier for them to focus on their professional field. With a deep understanding of the field, I believe that I am able to offer each athlete the best service, with the aim of helping him realize his maximum potential, while maintaining peace regarding the tax issues.