Thursday, May 28, 2009

Manny “Pacman” Pacquiao: Tax on boxing awards and prizes

With the duly concluded fight with Ricky Hatton and with the advent of his historic fights throughout the last decade, Manny "pacman" Pacquiao proves to be the Greatest of them all and the Pound for Pound King in the boxing arena. The question commonly being posed is, what keeps Pacman a great Fighter of his time?

Based on my personal observations, it is undeniable that Pacman is a faithful Roman Catholic and God fearing, a true Pinoy characteristic. He does not fight with his own strength alone, but he fights along with His creator above. This is evident prior to the commencement and at the end of every brave fight in the prestigious boxing ring he faces with his simple religious rite made at the corner of the ring. Another factor is his exemplary speed and power coupled with great ability and style. His team does its homework in studying the ups and downs of its opponent and designing effective styles and techniques specially designed for the particular opponent. I believe, each one of us applies a similar concept, to concentrate on each work at hand and see to it that it is successfully undertaken. Another notable factor is his hard work and strict discipline during his training with the end view of upgrading his personal power and ability. For all these, I, with all my heart salutes Pacman and say that truly, his a true Pinoy.

Apart from all these, let me try to unfold my views on how his winning from such boxing bouts are being taxed in his native land, Philippines. This is the very heart of this blog, to explore on the tax implications and and application of Philippine taxes. All of us knew that boxing industry pours in a lot of dollars to the respective pockets of related personalities and companies. Of course, it would not go far from the contenders, such as Pacman, Donaire, Viloria, Hatton, Marques, Penalosa, and more.

Believe it or not, our Philippine tax rules provides for a tax exemption for prizes and awards granted to athletes in sports competition based on the following requirements:

a. That there was a local or an international sports competition;
b. That the same was held locally or abroad;
c. That the sports competition is sanctioned by the national sports association recognized by the Philippine Olympic Committee;
d. That the contender is a Filipino; and
e. That the promoter is a Filipino individual or a corporation or company, of which 60% is owned by a Filipino or a domestic corporation.

Based on the above, the probability that prize and award of Pacman, and other boxers, on their great boxing bouts, are not far from being exempt from income tax in the Philippines, irregardless of the amount involved. This is without prejudice however, to the application of the foreign tax law where the bout was held and to the Tax Treaty between the said foreign country and the Philippines.

Taxes affects lives, dare to care on taxes and save lives!


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