외국 연예인 및 체육인의 과세문제 = Taxation on Foreign Entertainers and Athletes

다국어 초록 (Multilingual Abstract)

As international personal exchanges increase, foreign entertainers and athletes are also increasingly providing their services in Korea through music concerts, sports events, and etc. This study analyzes how the domestic source income of those foreign entertainers and athletes should be taxed according to the tax treaties and domestic tax laws.
The domestic source income of foreign entertainers is, based on their staying duration, classified into the payment for short-term performance and the payment for long-term performance. Based on the classification, tthe former is taxed as independent personal service income or separate entertainment-sports income in each tax treaty, while the latter can be taxed as labor income if foreign entertainers are hired from domestic management company.
Taxation on foreign athletes is similar to that on foreign entertainers. That is, their domestic income is classified and differently taxed based on whether they are engaged in short-term or long-term contract. Additionally, the transfer fee paid to the foreign athlete’s original association is taxed as either personal service income or other income whether the comprehensive rights and duties for the foreign athlete are succeeded or not.
In some cases when personal services of foreign entertainers and athletes are rendered through agent companies, the “substance-over-form doctrine” should be adopted to decide the real provider of such services to be taxed. In other cases, payments for such services are exempt from taxation when each tax treaty prescribes in such a way.
Furthermore, the VAT reverse charge rule should be adopted to domestic persons who are provided such services from foreign entertainers and athletes.
Analyzing various tax issues on the domestic source income of foreign entertainers and athletes which is rapidly increasing recently, this study is expected to be a useful material for tax study and practice.