Tax Treaty qualification of payments made to models performing in fashion shows and photo sessions

The following article – written for and originally published in the journal European Taxation, IBFD (2019, Vol. 59, No. 6) – deals with the Decision No. 21865/2018 where judges held that remuneration paid to non-resident models in connection with the shooting of commercials in Italy constitutes income from independent personal activities for the purposes of applying Italian tax treaties.

It provides also an overview of recent Italian tax case law on the treaty qualification of payments to non-resident models, with the aim of understanding how the Italian tax courts have approached the matter to date.

Additionally, in consideration of the overall uncertainty regarding the interpretation of article 17 of the OECD Model (“Entertainers and Sportspersons”), the article introduces also the main features of the elective tax regime for new Italian residents as an alternative mechanism for reducing, in cross-border scenarios, the tax liability of models with international exposure.

For additional insights in Italian language, see also here.