As the status of professional athletes is not regulated under Czech law, legal interpretation is required on this matter. The Czech Republic's Supreme Administrative Court has ruled in 2011 that athletes' work is of such a specific nature (eg the method by which they are paid, the length of their rest periods, and other instances of non-compliance with the country's Labour Code), that it is not illegal for clubs and athletes to enter into contracts other than labour contracts. Thus, at least in terms of taxes, athletes can act as self-employed persons.
If an athlete is a tax resident of the Czech Republic, their tax duty covers the income they have earned abroad, as well as that which they have earned in the Czech Republic. Athletes are tax residents of the Czech Republic if they have their domicile in the country or if they usually reside there. Tax non-residents are those individuals who are not tax residents or who are defined as tax non-residents by an international convention (e.g. double taxation conventions). Tax non-residents are only obliged to pay taxes in the Czech Republic on the income they earn in the country. If an athlete meets the definition of being a tax resident of two or more countries at the same time, a solution should be sought in double taxation conventions. The fourth Article of the OECD's model tax convention to avoid double taxation stipulates further criteria to determine tax residency (the tiebreaker rule).
Article 17 of the OECD's model tax convention lays down the special taxation regulation for athletes. The commentary to this convention lists the sports whose participants are considered athletes under the OECD model convention: in addition to football, tennis and motorsports, this list also includes snooker, chess and bridge.
Current wording of the Article 17 OECD's model tax convention:
"1. Notwithstanding the provisions of Article 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artist, or a musician, or as an sportsperson, from that resident's personal activities as such exercised in the other Contracting State, may be taxed in that other State.
2. Where income in respect of personal activities exercised by an entertainer or a sportsperson acting as such accrues not to the entertainer or sportsperson but to another person, that income may, notwithstanding the provisions of Article 15, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised."
The general regulations under the OECD model tax convention's Article 7, which regulates the taxation of the profit of companies and entrepreneurs, and Article 15, which regulates the taxation of income from labour contracts, are not applicable for athletes. Therefore it is not decisive if the athlete, as a tax non-resident, is employed or acts as a self-employed person. Their income earned by athletes will always be taxed under the regulation of Article 17.
With regard to the future development of Article 17, the OECD’s Committee on Fiscal Affairs issued in 2010 the proposal of the potential amendments of the Article 17 for discussion. Within commentaries of 11 organizations and many individuals appears among others the opinion that Article 17 should be deleted from the OECD model tax convention and that athletes and artists should fall under the regulation of Articles 7 and 15. This argument is traditionally upheld in the Netherlands, which for long a time has not implemented the article concerning the taxation of athletes. Another option would be to introduce a new de minimis rule in relation to the taxation of athletes and artists. The application of this regulation would allow states to stipulate that athletes whose income does not exceed a previously specified amount will not fall under the regulation of Article 17.
Other proposals for amendment of the Article 17 mainly concern the regulation of one-time prize money, the income earned by sports journalists, rehearsal and training issues, the implementation of the gender neutral term of sportsperson instead of sportsman, and others matters.