Foreign Star Companies of Athletes and Entertainers: Italian Source Rules and Tax Treaty Issues

In this note, the authors examine the Italian tax treatment of foreign star companies used by athletes and entertainers for the commercial exploitation of their image rights. The note analyses the characterization and source of image-rights income under Italian tax law, with particular regard to the territoriality rules applicable to non-resident companies and considers their interaction with article 17(2) of the OECD Model. Finally, the authors discuss recent Italian case law concerning the interposition of a foreign star company and the resulting issues of international double taxation.