The income tax implications for individuals involved in the 2010 FIFA Soccer World Cup in South Africa compared to the 2012 Olympic Games - Lessons from London?

Abstract

The taxation of individuals involved in cross border mega sports events is an international phenomenon which creates problems in the area of source- and residence-based taxation. The OECD Model Tax Convention provides that a sportsperson will be taxable in the source country where he participates. During the 2010 FIFA Soccer World Cup in South Africa, exemptions from income tax were enacted in favour of individuals within a so-called ‘tax-free bubble’ or designated geographical area. This exemption did not apply to the players. The 2012 London Olympic Games in the UK also granted tax exemptions to accredited individuals and those involved in broadcasting and performing at the opening ceremony. Sportspersons were permitted to participate in the London Olympic Games without incurring a liability for income tax. This article will compare the tax exemptions granted to individuals during the London 2012 Olympic Games to the exemptions granted during South Africa’s 2010 Soccer World Cup to determine possible suggestions for the improvement of the rules for the hosting of future mega sports events in South Africa.