Taxation of sponsorship agreements in China - the rules for International Sports Federations without permanent establishment

Published 29 January 2019 By: Guo Cai

China Flag with sports and tax background

It is not uncommon nowadays to spot Chinese companies' profiles at international sports events such as the 2018 FIFA World Cup and Pyeongchang Winter Olympics. Alibaba Cloud tied the knot with the International Olympic Committee confirming its Olympics Partner (TOP) status, and Alipay marched into the UEFA national men's competitions not only aiming for Chinese fans travelling to Europe for UEFA Games, but also carrying the ambition to "build awareness of Alipay's brand worldwide before a potential expansion beyond its home market".1 Chinese companies are riding the trend to sponsor international sports events in exchange for greater international impact. Such sponsorship deals will usually generate income derived from Mainland China (hereinafter referred to as “China”).

The author of this article has been receiving enquiries from international sports organizations and federations (IFs) regarding relevant tax obligations for IFs without permanent establishments in China. This article is intended to clarify these questions. For the purpose of this article, “permanent establishments” refers to a fixed place of business through which the business of an enterprise is wholly or partly carried on.2


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Guo Cai

Guo Cai

Attorney, Jin Mao Law Firm

Ms. Guo Cai oversees the LexVeritas Sports and International Law Group, Jin Mao Law Firm (People's Republic of China), the first Chinese law firm to have a practice group dedicated to the sports industry. Ms. Cai graduated from Harvard Law School and China University of Political Science and Law. She also held an LLM in Human Rights (distinction) from the University of Hong Kong. Admitted to practice in China and the US (New York), Ms. Cai specialises in international dispute resolution and sports law, growing with the Chinese sports industry and connecting international best practice with sports in China.

蔡果律师是金茂律师事务所(中国)体育产业与国际法组的负责人。 金茂律师事务所是首家投入体育产业并专设服务组的中国律师事务所。蔡果律师毕业于哈佛法学院和中国政法大学,并以第一名获得香港大学人权法硕士学位。蔡果律师具备中华人民共和国与美国纽约州执业资格,专攻国际争议解决与体育法,致力结合国际最佳标准,与中国体育产业共同成长。

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