Tax Treaty Case Law around the Globe 2019
1. Aufl. 2020
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S. 305Supreme Court of , case no. 21865
Mario Tenore
S. 3061. Introduction
The case reviewed in this chapter deals with the treaty qualification of income paid to a foreign fashion agency as a consideration for the services of models regarding the realization of video commercials on Italian territory.
The author will comment on the decision taking into account prior case law and 2014 amendments to the Commentary on article 17 of the OECD Model.
2. Facts of the case
In the years from 2000 to 2003 an Italian resident company paid to a fashion agency, a Swiss resident entity, a consideration for the services of models regarding the realization of video commercials on the Italian territory. According to the judgment, the models were tax resident in countries with which Italy had a tax treaty patterned on the OECD Model.
Under Italian domestic law, income earned through fashion modelling is characterized as self-employment income if the activity is carried out by the individual on an independent and habitual basis. Remuneration paid to non-resident models is subject to a 30 % withholding tax applied on the gross amount (i.e. without deduction of expenses) according to article 25(2) of Decr...