Double tax treaties containing a particular provision give the country in which the performance income arises sole taxing rights over such income, even if the individual is not resident there.
The tax treatment of image rights income is, however, generally separate from performance income and not subject to tax at source.
Many in the field of sports or entertainment seek to register their image rights and assign them to a corporate entity that then exploits them. The income, in the form of royalties, is not personal to the individual and, subject to the application of various anti-avoidance rules, can be enjoyed on a tax deferred basis.
Of course, all rules are subject to exceptions.
After HMRC successfully won a case involving the tennis player Andre Agassi, endorsement income of a non-UK resident individual is liable to UK taxation provided it is paid in connection with their performance.
The UK tax is calculated by looking at the worldwide endorsement income of the individual and allocating a portion of it to their UK activities on a just and reasonable basis, which is often very subjective.
Miles Dean is managing partner at Milestone International Tax Partners