Athlete Endorsement And Cross-Border Sponsorships: Compliance, Taxation And Business Of Sports
- IJLLR Journal
- Apr 22
- 2 min read
Abin George Jacob, CHRIST (Deemed to be University), Delhi NCR
1. Introduction
In the global sports industry, the athlete endorsements represent one of the most dynamic intersection among the field of commerce, media and taxation. From the traditional image rights and sponsorships to digital collaborations and non-fungible tokens (NFTs), the digitalisation of endorsement activities has increased the challenges to the principles of international taxation and jurisdictional boundaries. The endorsement industry which once used to localize around the performance and physical appearances and has gone digital and also beyond the boundaries. It has extended into digital ecosystem which is driven by global streaming platforms, social media monetization and metaverse engagements. These developments necessitate a re-evaluation of how nations should tax on income, determine income source, and also of how the athletes who work across different jurisdiction should oblige to them (Vann, 2021).
Athlete endorsements acts as a economic instrument and also as a strategic branding vehicle. For elite athletes, endorsement contracts frequently surpass their direct earnings from sports performance. This creates multiple income source stream which may directly or indirectly is associated to intellectual property, personal image and global fan engagement (Goddard, 2020). Due to these many income sources, it makes the taxation complicated. Athlete endorsements acts both as an economic instrument as well as strategic branding vehicle. For elite athletes, endorsement contracts frequently surpass direct earnings from their sport performance, which creates complex incomes streams which are associated to personal image, intellectual property and global fan engagements (Goddard, 2020). Due to these complicated income source, it makes the taxation complicated. The traditional taxational method, which is built mainly on physical performance and also performance based sourcing are growing inadequate for addressing the virtual and hybrid income models which is present in the modern sports economy. Due to this, both the tax authorities and the multinational sponsors face challenges in defining nexus of taxation, whether the endorsement income arises only from the athletes performance, the consumer market or the digital environment from where the athletes receive the endorsement income (OECD,2019).
