@2010Australian taxation lawsTaxation being an important part of the growth of a country’s economy, it is important to offer efficient and reliable advice to members of the public for the purposes of enabling them understand tax payment. Mr. Lawrence Grabbit’s idea is great since sports people (especially professional sports people) are many and as well earn from a range of activities. These activities are not limited to sports. They sometimes include sponsorships and advertisements. Despite these earnings, sports people have a wide range of expenses in relation to their health, fitness and training (when charged for the services). A professional sports person’s taxes vary with the conditions set by law since they could be natives of a country or foreigners and thus they are taxed differently.
The information given here details the earnings of sportspersons living in Australia. There is need to consider what could be referred to as price money and what could be referred to as income for such sports people. It is very important that companies offering information about tax give information that can be trusted. This seeks to alleviate the problems that could arise like in the ruling of the high court in a case between FCT and a sports woman in Australia. The lady, then working as a policewoman, counted her being a policewoman as her main job and thus the source of her taxable income.
However, the taxation commission in her country found it necessary to tax her even on the amount of money she made on sports activities which she referred to as her hobby. She had however received more from her hobby in terms of prize money, grants, appearance fees, sponsorships and awards.
All these were supposed to be taxed; an issue she did not agree with thus prompting the misunderstanding between her and the taxation commission. This is a misunderstanding that could easily be solved if there was a clear outlay of the differences between taxable income of the individual athlete and the gifts given to them by various organizations. In the case of a professional athlete, income should be the amounts associated with the exploitation of the talent or hobby of the athlete with the intention of making money or generating the particular income.
In situations where an award or a prize is awarded to the athlete as an appreciation for excellence, then there is need to consider it prize money which should not be part of the athlete’s taxable income. This includes the amount granted by sports clubs, individuals and even the nation as an appreciation of the skill. This mainly involves individuals who do not involve effort in trying to get the money, that is, individuals who do not exploit their talents with the intention of getting money.
Money earned by means of a sports contract is what is referred to as income for the professional athletes while that which is granted without it necessarily being part of their contract agreements is much like a gift.