Esports and tax: how the OECD Model Tax Convention applies to players’ income

Esports are turning from a social phenomenon into a real industry, raising in parallel complex legal and tax issues. As far as taxation is concerned, there are significant questions as to whether the current international tax rules are fit to address the phenomenon or whether changes are required.

This article examines the relevant international income tax issues relating to esports from the perspective of gamers, focusing in particular on income that is closely connected to performance such as the prize money[1].  It then draws some conclusions on the adequacy of the existing rules (namely Article 17 of the OECD Model Tax Convention – ‘OECD MTC’) to address the specific tax issues of esports players.  Specifically, it examines:

• The difference between playing online and offline
• Types of income
• Application of Article 17 OECD MTC
• Why esports players fall under Article 17
• Main features of Article 17
• The place of performance in the context of esports