CANBERRA, July 20 (Xinhua) -- Australia's biggest sports stars have been granted a tax break which could save them tens of thousands of dollars every year, after the Australian Taxation Office (ATO) deemed that sportspeople should be able to benefit from their image rights.
Under the changes, sporting figures will be able to allocate up to ten percent of their pre-tax earnings into a trust with a lower tax rate than what they usually pay, meaning some of Australia's highest-paid sports stars will save up to 40,000 Australian dollars (32,000 U.S. dollars) per year.
Top earners in Australia pay a marginal tax rate of 45 percent on their earnings, but the trust in which they can deposit 10 percent of their salary will be taxed at a rate of 27.5 percent, saving those who earn 1 million Australian dollars (800,000 U.S. dollars) up to 19,500 Australian dollars (15,500 U.S. dollars) every year.
Australia's highest paid cricketers, such as David Warner, will save almost 40,000 Australian dollars (32,000 U.S. dollars) on their approximate 2 million Australian dollar (1.6 million U.S. dollar) salary.
The ATO said the move was fair because athletes endure "exploitation" of their image to promote their sport - something for which they are not often paid.
"The ATO will accept that up to 10 percent of these payments can be treated as referable to the use and exploitation of the professional sportsperson's 'public fame' or 'image' under the associated resident third-party's licence and are therefore to be treated as the income of the associated resident third-party," an ATO statement said.
"It is also recognized that a sporting code's collective bargaining agreement can place restrictions on amounts that professional sportspeople can be paid (such as minimum terms and conditions) and that these restrictions can suppress the level of the sportsperson's remuneration," the statement added.
Meanwhile, Brett Murphy from the Players' Association of the Australian Football League (AFL) told News Corp on Thursday that the tax break means players get a "fair return" on the use of their image for the league's commercial gain.
"This ruling recognizes the value of a player's image and ensures that they receive fair return for its commercial use," he said.
