Work is currently under way on a legal framework that will make not only the Olympic and Paralympic bonus payments, but also prize money from cultural and scientific prizes exempt from income tax.
The Finance Minister told journalists that “Many people from the worlds of sport, culture and science win awards with cash prizes in foreign countries. We intend to work on drafting a legal framework that will define when such prizes will be exempt from tax”.
Bilateral agreements are made with other countries on where (in Belgium or the country concerned) a Belgian that earns money abroad is liable for tax. This also applies to income earned from sporting endeavours and includes bonuses and prize money.
Previously the Belgian Tax Office said that the Olympic and Paralympic athletes will be liable to pay tax on their bonuses here in Belgium unless the Federal Government decides to grant them an exemption. Now the office of the Federal Finance Minister Vincent Van Peteghem says that he and his staff are currently working on a new legal framework that will make prize money and bonuses earned for endeavours in the fields of sport, culture and science by Belgians abroad exempt from tax.
Mr Van Peteghem says that his department is looking for a long-time solution and not just a quick fix. “Because we shouldn’t forget that a lot of Belgium earn their income abroad. Every eventual exemption will have need to have been granted for a thoroughly sound reason and be based on strong legal arguments. We should avoid making arbitrary decisions at all costs”.
The athletes that competed in London in 2012 and Rio in 2016 were liable for tax in the UK and Brazil respectively. Both countries decided that Olympians and Paralympians would pay 0% tax on their bonuses earned during the games. This time around the agreement between Belgium and Japan states that earnings by Belgian Athletes during the Tokyo games are subject to tax in Belgium.