Where do athletes actually pay taxes? Key rules you need to know

The deadline for filing annual personal income tax returns for 2025 is approaching, with the final date set for May 15 of the current year. All tax residents of Serbia are subject to this tax.

This article focuses on athletes and their specific situation, primarily related to the seasonal nature of their work and frequent changes of clubs across different countries within a single calendar year.

To begin with, it is important to define what it means to be a tax resident under the laws of the Republic of Serbia. There are two main criteria:

 – An individual who spends more than 183 days in Serbia during a year is considered a tax resident.
– An individual who has their center of vital interests in Serbia, even if they have not spent more than 183 days in the country, is also considered a tax resident.

Let us consider a more complex example. During 2024, a basketball player played for a club in Greece from January until mid-June. After that, he stayed in Serbia, training as a free agent, and in early September signed with a club in Turkey, where he played until the end of the year.

In this case, the player did not spend more than 183 days in any single country, so at first glance it might appear that he is not a tax resident anywhere. However, in practice, it is almost impossible for an individual not to have tax residency. In such situations, additional factors are analyzed to determine the center of vital interests, such as ownership of real estate, residence of close family members, children’s education, and similar considerations.

It is also important to consider residence permits, long-term visas, as well as bank accounts where income is paid. Particular attention should be paid to how these accounts are classified by banks (as resident or non-resident). In practice, it often happens that athletes, even if they do not live in Serbia, hold resident accounts, which can be problematic from a tax perspective. Additionally, opening a foreign bank account with a Serbian address before obtaining a residence permit may create difficulties when transferring funds to Serbia.

If you are a tax resident of Serbia, you may be liable to pay two types of tax on income earned abroad:

 – Tax on salaries and bonuses, with the application of double taxation avoidance agreements (Serbia has more than 60 such agreements), as well as other international treaties.
– Annual personal income tax.

It is not uncommon for professional athletes, especially in sports that do not require constant presence in one location (such as tennis), to choose jurisdictions with lower tax burdens as their tax residence, such as Monaco, Dubai, Andorra, or certain cantons in Switzerland.

There are also more complex scenarios, for example when an athlete spends more than 6.5 months in Poland during a calendar year, then two months in Serbia, and then 3.5 months in Turkey. In such cases, the question arises whether the athlete acquires tax residency in Poland. The answer also depends on the local regulations of the country where the athlete is engaged, as some countries apply different criteria – for example, in England, a certain tax status may be obtained after only 90 days of stay.

In cooperation with foreign tax advisors, we can provide support in such situations as well.

Athletes holding dual or multiple citizenships may, in certain cases, use the one that offers a more favorable tax treatment.

We always advise our clients to carefully collect documentation – both from the clubs that engage them and from the relevant government authorities.

As can be seen, there is no universal rule for determining tax residency. Each case is approached individually, with detailed analysis and planning of all potential scenarios, in order to ensure that obligations are met in the right place and at the right time.

It is important to note that tax offenses or tax evasion, if there is intent to avoid payment, may be subject to review by tax authorities until the statute of absolute limitation expires, which in some cases can be as long as 25 years. Practice shows that, for example, freelance activities have been subject to review up to five years retroactively, even for relatively small amounts.

For timely planning and certainty regarding the tax treatment of your income – we are at your disposal. Contact us.