IRAS had recently completed a review on the tax treatment of the various sports awards including the Multi-Million Award Programme Award (MAP), the Singapore Sports Award (SSA) and the Athletes’ Achievement Awards. Following the review, IRAS would like to clarify that how the sports awards received by an individual is to be treated for income tax purposes will depend on the status of the individual. Details will be elaborated in the following paragraphs.
- Where the individual is an employee of a sports body, the sports awards granted to the individual constitutes employment income of the individual and are taxable.
- Where an individual is not an employee of a sports body but is carrying on a trade, business, profession or vocation in relation to his/her sporting ability, the sports awards and monthly stipend are gains or profits from a trade, business, profession or vocation and are taxable.
- If the individual is neither an employee of a sports body nor carrying on a trade, business, profession or vocation in relation to his/her sporting ability, the sports awards and monthly stipend are generally not taxable.
- As the status of an individual may change overtime, for example, from a recreational player in one year to an athlete employed by a sports body or an individual carrying on a trade, business, profession or vocation in relation to his/her sporting ability in the following year, the taxability of the sports awards and monthly stipend (where applicable) would have to be determined based on the facts and circumstances of each case.
- Notwithstanding that an individual is neither an employee of a sports body nor an individual carrying on a trade, business, profession or vocation in respect of his/her sporting ability, receipts in exchange for services or for rights to use property would be taxable. Examples of such receipts include endorsements, sponsorships, coaching fees and royalties.
To further understand the tax treatment of the awards and other payments made to the athletes, IRAS has prepared a list of FAQs which is available on IRAS website at https://www.iras.gov.sg/irashome/infoSE/ or you may find the FAQs at here.
