In a recent ruling, the House of Lords has released its decision in the Agassi Case (http://www.publications.parliament.uk/pa/ld200506/ldjudgmt/jd060517/agasro-1.htm). In brief, the Court ruled that Andre Agassi - http://www.agassiopen.com/ -(a US resident) was subject to tax in the UK not only with respect to prizes earned while taking part in tournaments in the UK, such as Wimbledon, but also with respect to certain monies paid by Head (http://www.head.com/) and Nike (http://www.nike.com/) to Agassi Enterprises Inc., a non-UK legal entity wholly owned by Mr. Agassi. Said monies were paid in consideration for contracts under which Mr Agassi sponsored and advertised the manufacturers' products.
Neither Nike nor Head was resident in the United Kingdom in the 1998/1999 tax year, nor did either company carry on any trade in the United Kingdom. Nor were their payments to Agassi Inc. made in the United Kingdom. In fact, the payments were not particularly to related to his performance in any UK tournament.
In short, Agassi was personally held liable to UK income tax in respect of income earned by a wholly owned enterprise (which was not disregarded for tax purposes) where none of the subjects involved nor the payments were territorially linked to the UK in a direct manner, but for Mr. Agassi's performance in UK which renders not a direct but an indirect link to the streams of income .
I believe this is a landmark case for sportsmen and artistes not only in the UK but in the world.My view is that under Argentine Law (and also under other Latam countries tax laws), the case would be entered opposite to the UK Agassi case, and that is because in general our tax regimes lack Sections similar to UK Sections 555 and 556 under which income can be deemed owned by the stakeholder of the legal entity. However, attention should be paid to general domestic anti-avoidance rules, together with the relevant Tax Treaty regulations that may take part in the particular case.
posted by P. Sebastian Lopez-Sanson @ 9:50 AM
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