Tax advice for professional athletes
A professional athlete coming to Germany or leaving Germany during the year is obliged to file a tax return in Germany. The part of the income received before coming to Germany or after leaving Germany is considered under progression clause as tax free income. This will have a negative influence on the amount of the applicable tax rate.
On the other side costs for application DVDs, fees for agents or moving expenses, can be deducted as tax expenses. The tax burden will be reduced.
We offer the following services to professional athletes:
- Preparation of German income tax return
- Avoiding of double taxation
- Support on claiming back pension insurance contributions
- Joint assessment even if spouse lives abroad
- Advice regarding the choice of tax classe
- Application for change of tax class
- General tax advice services
Taxation on individual sport disciplines
Professional athletes, practicing an individual sport discipline such as tennis player or track and field athletes, usually gain income from trade and business. Earnings from appearance fees, price money and advertising or sponsoring contracts are considered to be income from trade and business activity. If you are working as a coach, this activity is treated as self-employed income. Furthermore, professional athletes are subject to VAT tax.
Taxation when practicing team sport disciplines
Professional sport has become more and more international in the last years. An increasing number of professional athletes are coming to Germany from abroad. Professional team athletes such as soccer players, handball players, volleyball players and basketball players are usually employed at a sports club. Therefore, they gain employment income.
Note: Usually contracts start with the beginning of the new season during the year. Consequently, professional athletes earned money abroad in the first half of the year before coming to Germany. In the second half of the year they receive their salary from their new German sports club. In this case, professional athletes are obliged to file a tax return in Germany.
Also interesting: Claiming back pension insurance contributions