Agassi loses out to taxman
Former world number one Andre Agassi has lost his battle over paying taxes to Britain's Inland Revenue on Wednesday, in a ruling that could have a significant effect on the tax liability of all international sportsmen and women who compete in British events.
A judge at London's High Court rejected the American's challenge over paying 27,520 pounds ($49,790) in tax for payments from sportswear giants Nike and Head, even though neither he nor they have a tax presence in Britain.
Justice Lightman ruled the tax was due for the 1998 to 1999 tax year, which runs from April to April, because the former world number one comes to Britain for a limited number of days a year for tournaments such as Wimbledon.
The payments Agassi received from Nike and Head, who provide his clothing and rackets, derived, at least in part, from playing in those tournaments.
The Inland Revenue said income tax of 27,520 pounds should be paid, based mainly on income calculations of 23,750 pounds from Head Sports AG and 102,158 pounds from Nike Inc during the tax year 1998 to 1999.
The 33-year-old argued that he could not be assessed in over payments made by Nike and Head because he has no tax presence in Britain.
"It is common ground that section 556 of the 1988 (Income and Corporation Taxes) Act subjects non-residents to tax, if the payment is made by an English company or a foreign company with a tax presence here," said Justice Lightman on Wednesday.
"The question raised is whether they are intended to be excused from liability if, instead, they are paid by a foreign company with no tax presence here.
"In my judgment it would be absurd to attribute to the legislature the intention that liability could in any and all cases be avoided by the simple expedient of channeling the payment through a foreign company with no tax presence here.
"If this were the case, the tax would effectively become voluntary. As it seems to me, the plain and obvious intention of the legislature was to impose an obligation on the person making the payment irrespective of his tax presence here."
Agassi has won 58 titles, including eight grand slams, and amassed $28 million in prize money during his career. He won his first grand slam at Wimbledon in 1992.
Reuters - & JB - 17/03/2004