Landmark ruling from the Constitutional Court: Taxes unpaid by clubs cannot be collected from athletes

The Constitutional Court (AYM) has annulled a legal provision that led to income tax, which sports clubs withheld from athletes' salaries but failed to pay to the tax office, being collected from the athletes themselves. The High Court ruled that this situation constituted a "disproportionate interference with the right to property" of athletes and imposed an excessive burden on individuals.

The Constitutional Court found a critical tax regulation, which has long caused serious deprivation of rights and legal disputes between clubs and athletes in Turkish sports, to be unconstitutional and annulled it. The decision, published in the Official Gazette, was shaped as a result of an objection filed by the Antalya 1st Tax Court to the Constitutional Court.

IT COULD NOT BE OFFSET, CREATING INEQUALITY

The case subject to the objection was based on a rule in the provisional Article 72 of the Income Tax Law No. 193. According to this rule, if a sports club withheld tax (deduction) from an athlete's salary but did not pay this money to the tax office, the athlete could not deduct this withholding from their debt (could not offset it) when filing their annual income tax return at the end of the year.

The Antalya 1st Tax Court took the matter to the highest judicial authority, stating that the athlete was being punished for the club's error and negligence, and that this situation created serious inequality among athletes playing for different clubs.

AYM RATIONALE: "THE POWER TO FORCIBLY COLLECT TAXES LIES WITH THE STATE"

Finding the application justified, the Constitutional Court drew a very clear legal framework protecting athletes while annulling the rule. The following important findings stood out in the High Court's justification for the annulment:

Clubs, as the "tax responsible" parties, are directly responsible for the payment of taxes withheld from wages at the source. From the moment the deduction is made, the athlete has no power of disposal or control over this money.

The state already has a strong legal mechanism at its disposal for taxes that the club has not paid to the state. In accordance with the provisions of the Law No. 6183 on the Procedure for the Collection of Public Receivables, the state has the authority to forcibly collect this tax debt from the clubs.

Demanding a tax debt, which is the responsibility of the club and which the state can forcibly collect from the club, from the taxpayer athlete again on the grounds that it could not be collected is contrary to the principle of proportionality and imposes an excessive burden on individuals.

With this landmark decision, even if clubs fail to fulfill their financial obligations and evade or delay taxes, the bill can no longer be passed on to the athletes. Athletes will no longer have to pay the price for the shares deducted from their salaries by paying taxes a second time.

News Source: 12punto