The biggest issues facing professional players in the Republic of Serbia

Esports, for the uninitiated, are multiplayer video games played competitively for spectators, currently the most famous examples include Dota 2, Counter-Strike GO, LoL, Fornite, Overwatch and World of Tanks. In the recent years the Esport scene has slowly abandoned the premises of internet cafes and weekend Lan parties and has taken to the spotlight by being broadcast worldwide through prominent television channels such as ESPN and through platforms of newcomers in the digital age of entertainment such as Twitch, Youtube and Facebook Live. Back in 2016, Belgrade was host to the World championship in CS:GO with a humbling prize pool of 100.000 EUR. By comparison, just last year the prize pool for the Dota 2 International championship was in excess of 34.000.000,00 USD not to mention Epic games investing a total of 100.000.000,00 USD in Fortnite tournaments all across the world. One thing is for certain, the landscape of entertainment is changing drastically and the younger generations will be its torchbearers.

During this year’s COVID-19 pandemic, with the large absence of traditional sports coverage, Esports came out on top as being one of the most watched forms of entertainment available. To get a clear picture of the European Esports market, Deloitte ran two extensive surveys focused on the different segments of the European Esports industry, the direct market participants and company representatives from across the industry, both of which concluded in June 2020. In these findings it is worth to note that 77% of the organizations invested in Esports stated that they managed to increase their revenues compared to 2018 accompanied by a boost in user numbers, which was classified as sign of a dynamically developing industry. Furthermore, the market for mergers and acquisitions in this area had a cash flow of 1.7 billion EUR in global transaction volume in the last year.

But what does this all mean for the professional players, managers, team owners and even the viewers? The legal implications of Esports have been ignored in most part by state authorities but that is bound to change in the coming years with the unrelenting and exponential growth of the industry. The lawmakers will have their hands full with issues such as copyright – video games are protected under copyright law and as such broadcasting of the tournament or live streaming on the internet, without the prior approval of the copyright holder i.e. the publisher, might be considered an infringement on the author’s exploitation rights, not to mention the fact that the publisher can alter the rules of the game by altering its source code. Gambling laws – an increasing number of video games have in game purchases called “loot-boxes” where the rewards are randomized but are acquired with real money, while certain jurisdictions such as China or Belgium have already designated these purchases as gambling or have out right banned them, most of the European states have yet to address this issue.

Employment laws – different Esports have different formats for competing, some are individual (Street Fighter V) while some are team based (League of Legends, Overwatch) with Esport players often being under contract with a professional Esports team. Currently players are typically employed under a “provision of services contract”, with the players being hired as a physical person / executor of work and paid a fee or as an entrepreneur having to issue invoices to their teams. There are instances where video game publisher required a specific type of contract between player and team, for instance, Riot games, required all NA and EU League Championship Series players to be employed by a team from 2017 onwards as a pre-condition to be eligible for a tournament. In contrast to executors of work i.e. contractors, players who are hired as employees are paid a salary. Whether a player is classed as an employee or a contractor can have real impact on both the player and the team in terms of obligations and money. Generally speaking, employees have higher legal protection and employers have higher obligations and both employer and employee usually pay higher taxes.  Team draft changes are extremely common in Esports and with the issue of constant employment change, visas for competing in tournaments held in foreign countries (which can vary depending if the country in question recognizes Esports as a sport) there are numerous other issues which have already been regulated for traditional sports such as minimum wage, paid holidays, sick pay, etc.

The question of employment transfers over to the most pressing issue for upcoming professional players –  taxes. Professional players must be aware of the tax implications of their earnings, including how their tournament winnings, player salaries, streaming income/donations and sponsorship funds are typically taxed.

Before delving into these issues it must be analysed if existing sport regulation is applicable to professional gamers. Under the Law on Sports of Republic of Serbia a professional athlete is defined as a person who is engaged in sports activity as his only or basic occupation, or an athlete who has the status of a professional athlete in accordance with the sports rules of the competent international sports federation, whereas sports activities are all forms of physical and mental activity which, through unorganized or organized participation, aim to express or improve physical fitness and spiritual well-being, create social relationships or achieve results in competitions of all levels. By this broad definition, which leans on the internationally recognized standards for sports, it can be concluded that professional gamers can be treated as athletes if they fulfil the above mentioned criteria.

As stipulated by the Law on Sports a professional athlete establishes an employment relationship with a sports organization by concluding an employment contract, for a definite period of time, with a maximum of five years. This employment contract must determine the salary and other incomes of the professional athlete in accordance with relevant laws. Other incomes of a professional athlete or gamer are not characterized as salary, meaning that they are taxed differently. The salary tax is 10% on top of the contributions for social security insurance which can amount to an additional 36%. Any winnings the professional gamer achieves throughout tournaments and competitions is taxed at a rate of 20% where the gross income of the winnings is reduced beforehand by 50% on the account of standard costs, all under the prior condition that this type of income must be paid by sports organizations, associations or federations. Income not paid by sports organizations, sports associations or federations is taxed at a rate of 20% and standard costs which are deducted represent 20% of the gross income.

As a general rule, the location of a specific tournament dictates which tax laws are applicable to a particular tournament prize pool. As an example, the 2016 Dota 2 “The International” was located in the U.S. and boasted a $20.7 million prize pool. Therefore, the players that won a portion of this prize pool, even those who were not U.S. residents, were subject to United States federal income tax on these winnings. With Esports the question where the outcome-defining activities manifest themselves becomes extremely relevant in determining which jurisdiction has the right of taxation on income made from tournament winnings. This is especially relevant in online tournaments. Are the income generating activities performed in the country where the player takes part in the competition, the country in which the team is established, in in the country where the servers are located or in the country of residence of the tournament organizer?  A professional gamer who is a Serbian resident is subject to taxation in Serbia on their worldwide income which means that tournament winnings awarded in foreign countries can lead to potential double taxation. It is of note that Serbia has entered into a significant number of multilateral and bilateral treaties based on the OECD Model Tax Convention in order to avoid this very issue. In practice, this means that cross-border European Esports employers and professional players will need legal and tax advice to ensure they have the proper employer tax setup.

Professional gamers are also profiting from new forms of compensation, including sponsorships and income from streaming through partnerships with streaming websites and donations from their viewers all of which are subject to different types of taxation. In regards to donations, it is worth pointing out that the money received as a donation from the same person, up to the amount of 100,000 RSD in one calendar year, is excluded from taxes while any amount exceeding this is subject to a 2,5% gift tax. The issue which arises is how is a streamer to know when one person has donated funds which exceed the legal minimum when the donations are conducted through online aliases which make the donator practically anonymous to the streamer.

Sponsorship fall into a different category on their own. When a sponsor gives a certain amount of money to the professional gamer or their team, who will in return publicly and in an agreed manner make it known that they are sponsored by a specific brand, this will be regarded as a transaction of services provided by the professional gamer or his team to the sponsor, which will then be subject to VAT. However, for the sponsors themselves it is relevant that the costs of advertising and propaganda are recognized as an expense in full in the tax balance.

Similar to any other type of income, benefits which professional gamers receive from their teams or sponsor are also taxed based on the fair market value of the benefit. For example, if a gamer received free air miles or products from a sponsor, they will be taxed based on the fair market value of those miles or products.

Even though the situation currently might not demand it, it is apparent that when negotiating the terms of their next gaming contract, professional gamers as well as their teams should utilise the advice of their tax advisor or legal professionals to determine the best way to structure the various forms of compensation they receive. In this regard our law office, along with the assistance of ZSTAX, provides the full scope of services necessary to ensure optimal legal security in the coming years.

Esport i vrlo dugačka ruka zakona

Najveći problemi sa kojima se suočavaju profesionalni Esport igrači u Republici Srbiji

Esport, za neupućene, su multiplayer igre koje se igraju u takmičarskom okruženju za gledaoce. Trenutno najpopularnije igre u ovoj sferi su Dota 2, Counter-Strike: GO, LoL, Fortnite, Overwatch i World of Tanks. U prethodnim godinama Esport scena je polako napustila igraonice i lokalne Lan turnire i našla se u centru pažnje emitovanjem na prominentnim kanalima kao što su ESPN i na platformama pridošlica digitalnog doba zabave kao što su Twitch, Youtube i Facebook Live. Još u 2016. godini Beograd je bio domaćin Svetskog šampionata u CS:GO koji je imao skromni nagradni fond od 100.000 EUR. Poređenja radi, samo prošle godine, nagradni fond za Dota 2 Međunarodni šampionat “The International” iznosio je preko 34.000.000,00 USD. Pri tom ne treba ni spomenuti da je Epic games investirao ukupno 100.000.000,00 USD u Fortnite turnire organizovane širom sveta. Jedna stvar je sigurna, pejzaž interaktivne zabave se menja drastično i mlađe generacije su njegovi pioniri.

Za vreme ovogodišnje COVID-19 pandemije praćene primetnim odsustvom prenosa tradicionalnih sportova, Esport se probio kao jedan od najgledanijih oblika zabave. U cilju dobijanja jasne slike evropskog Esport tržišta, Deloitte je sproveo dve ekstenzivne studije koje su bile fokusirane na različite aspekte evropske Esport industrije, prvo na direktne učesnike na tržištu a zatim i na predstavnike kompanija širom industije, obe studije su završene u junu 2020. godine. U nalazima ovih studija značajno je ukazati da je 77% organizacija investiranih u Esport navela da uspevaju da povećaju svoje prihode u poređenju sa 2018. godinom uz dodatno povećanjee broja korisnika, što je klasifikovano kao znak industrije koja je praćena dinamičnim razvojem. Dodatno, tržište za M&A transakcije u ovoj oblasti u toku prethodne godine videlo je protok kapitala u iznosu od 1.7 milijardi EUR u transakcijama na globalnom nivou.

Ali šta ovo znači za profesionalne igrače, menadžere, vlasnike timova čak i gledaoce? Pravne implikacije Esporta su dugo vremena bile ignorisane od strane državnih vlasti ali i to je neizbežno da se promeni u predstojećim godinama usled neprestanog i eksponencijalnog rasta ove industrije. Zakonodavci će imati pune ruke sa pitanjima kao što su autorska prava – video igre su zaštićene putem autorskih prava i kao takve emitovanje turnira ili streamovanje uživo putem internet, bez prethodno pribavljene saglasnosti nosioca autorskog prava tj. izdavača, može predstavljati povredu autorovih prava na komercijalno iskorišćavanje dela, ovo i bez da spomenemo da izdavač može menjati pravila igre izmenama source koda. Zakoni o igrama na sreću – sve veći broj video igara sadrži mogućnost za dodatne transakcije unutar samih igara koje su kolokvijalno zovu “loot-boxes” a koje sadrže nagrade koje su nasumično dodeljene i koje nagrade mogu da variraju u svojoj vrednosti po kojoj se preprodaju putem eksternih web siteova. Pojedine zemlje kao što su Belgija i Kina već su svojim zakonima okarakterisale ove vrste transakcija kao podvrstu igara na sreću, ili su ih čak izričito zabranile, dok većina evropskih država tek treba da adresira ovo pitanje.

Radno pravo – različiti Esportovi imaju različite formate za takmičenje, neki su individualni (Street Fighter V) dok su neki timski (League of Legends, Overwatch) gde su profesionalni igrači uglavnom pod ugovorom zaključenim sa profesionalnim Esport timom. Trenutno igrači su tipično angažovani putem ugovora o pružanju usluga, gde su igrači najčešće angažovani u vidu izvršioca posla za šta im se isplaćuje naknada ili u vidu preduzetnika u kom slučaju izdaju račun timu za svoje usluge. Postoje slučajevi gde izdavači Esport video igara zahtevaju posebnu vrstu ugovora između igrača i tima. Primera radi, Riot games od 2017. godine zahteva od svih igrača koji učestvuju u Severnoameričkoj i Evropskoj Seriji Lige Šampiona da bude zaposleni od strane svog tima kako bi bili kvalifikovani da učestvuje na turnirima. U odnosu na igrače angažovane kao izvršioce posla, igrači koji su zaposleni u timu igraju za platu. Da li je igrač klasifikovan tj angažovan kao zaposleni ili na neki drugi način može imati veliki uticaj kako na samog igrača tako i na tim u pogledu obaveza i novca. Uopšteno govoreći, zaposleni imaju veću pravnu zaštitu a poslodavci veće obaveze a zaposleni i poslodavac zajedno plaćaju veće poreze i doprinose u odnosu na druge vidove angažovanja. Promene postave timova su ekstremno česte u Esportu i zajedno za problemom stalne promene zaposlenja, vizama za učestvovanje na turnirima koji se održavaju u stranim zemljama (koje mogu da variraju u zavisnosti od toga da li država domaćin priznaje Esport kao spor) postoji bezbroj drugih problema koji su već regulisani u tradicionalnom sportovima kao što su minimalna zarada, plaćeni odmori, prekovremeni rad, bolovanje itd.

Pitanje zaposlenja se prenosi na možda najbitnije pitanje za buduće profesionalne igrače – porezi. Profesionalni igrači moraju biti svesni poreskih implikacija njihove zarade, što uključuje znanje o tome kako se obračunava i plaća porez na njihove nagrade sa turnira, zarade, prihodi/donacije dobijene putem streamovanja i sponzorstva.

Pre nego što se upustimo u analizu ovih problema moramo postaviti pitanje da li je postojeća regulativa sporta primenjiva na profesionalne Esport igrače. Prema Zakonu o sportu Republike Srbije profesionalni sportista je sportista koji se bavi sportskom aktivnošću kao jedinim ili osnovnim zanimanjem i drugi sportista koji ima status profesionalnog sportiste u skladu sa sportskim pravilima nadležnog međunarodnog sportskog saveza, gde se sportske aktivnosti definišu kao svi oblici fizičke i umne aktivnosti koji, kroz neorganizovano ili organizovano učešće, imaju za cilj izražavanje ili poboljšanje fizičke spremnosti i duhovnog blagostanja, stvaranje društvenih odnosa ili postizanje rezultata na takmičenjima svih nivoa. Prema ovoj dosta široko postavljenoj definiciji koja se u određenoj meri oslanja na međunarodne standarde, profesionalni Esport igrači mogu se tretirati kao sportisti ukoliko ispunjavaju gore navedene kriterijume.

Kao što je navedeno Zakonom o sportu profesionalni sportista zasniva radni odnos sa sportskom organizacijom zaključenjem ugovora o radu, na određeno vreme, najduže do pet godina. Ovim ugovorom o radu mora biti utvrđena zarada i drugi prihodi profesionalnog sportiste u skladu sa zakonom. Drugi prihodi profesionalnog sportiste i Esport igrača nisu okarakterisani kao zarada, što znači da se oporezuju po drugom osnovu. Porez na zaradu je 10% povrh doprinosa za obavezno socijalno osiguranje koji mogu iznositi dodatnih 36%. Sve nagrade koje Esport igrač osvoji kroz učešće na turnirima i kroz druga takmičenja oporezuju se kao prihodi sportista po stopi od 20% gde se priznaju normirani troškovi od 50% putem umanjenja bruto prihoda sve pod uslovom da ova primanja isplaćuju sportske organizacije, udruženja ili savezi. Prihodi koji nisu isplaćeni od strane sportskih organizacija, udruženja ili saveza oporezuje se takođe po stopi od 20% kao dodatni prihod ali priznati normirani troškovi iznose 20% na bruto prihod.

Kao opšte pravilo lokacija pojedinačnog turnira dikitira koji se poreski zakoni primenjuju na određene nagrade iz nagradnog fonda. Kao primer, svetsko takmičenje iz Dota 2 “The international” koje je 2016. godine održano u Sjedinjenim Američkim Državama imalo je nagradni fond koji je bio nešto preko 20 miliona USD. Igrači koji su osnovjili deo ove nagrade, čak i oni koji nisu državljani SAD, bili su u obavezi da plate federalni porez na dohodak koji naplaćuje SAD. Kada je u pitanju Esport pitanje gde se ispoljavaju radnje po osnovu kojih se postiže određeni rezultat u takmičenju postaje izuzetno relevantno prilikom utvrđivanja koja jurisdikcija ima pravo da oporezuje nagrade dobijene za pobedničke plasmane na takmičenjima. Ovo je naročito relevantno kada se turniri održavaju online. Da li se aktivnosti koje predstavljaju izvor prihoda preduzimaju u mestu gde se profesionalni igrač nalazi prilikom učešća na turniru, u državi u kojoj je tim osnovan, u državi u kojoj se nalaze serveri preko kojih se takmičenje održava ili u državi porekla organizatora turnira? Profesionalni igrač koji je državljanin Republike Srbije u obavezi je da izmiri porez prema Republici Srbiji na sve nagrade osvojene širom sveta što u praksi znači da nagrade osvojene u stranim zemljama mogu voditi do potencijalnog dvostrukog oporezivanja. Bitno je naglasiti je da je Republika Srbija potpisnica značajnog broja multilateralnih i bilaterlanih sporazuma o izbegavanju dvostrukog oporezivanja koji su bazirani na O.E.C.D. modelu kao i da je potpisnica Multilateralne konvencije koja je suštinski, kada je reč o Srbiji počela da se primenjuje od oktobra 2018. godine, sve u cilju regulisanja ovoga problema. U praksi, ovo znači da Esport igrači i njihovi poslodavci moraju zatražiti pravni i poreski savet kako bi osigurali optimalan poreski tretman koji je u svačijem zajedničkom interesu.

Profesionalni igrači takođe profitiraju putem drugih oblika kompenzacije uključujući sponzorstva i prihode od streamovanja kroz partnerstva sa websajtovima koji pružaju usluge streamovanja a koji su svi podložni različitim poreskim tretmanima. U pogledu domacija prilikom streamovanja, bitno je ukazati na to da novac koji je primljen na ime donacije od strane istog fizičkog lica i koji ne prelazi iznos od 100.000 RSD u jednoj kalendarskoj godini ne predstavlja oporeziv prihod dok iznos koji prelazi ovu granicu podleže porezu na poklon od 2,5% i čiji je obveznik poklonoprimac. Problem koji se ovde javlja je kako da osoba koja streamuje svoj sadržaj stekne saznanje o tome kada je jedan donator premašio navedeni zakonski maksimum kada se donacije sprovode putem lako promenjivih online nadimaka koji čine donatora praktično anonimnim.

Sponzorstva spadaju u potpuno drugačiju kategoriju. Kada sponzor daje primaocu sponzorstva određeni novčani iznos, a primalac sponzorstva zauzvrat javno i na ugovoreni način ističe da je sponzorisan od strane sponzora i na drugi način reklamira sponzora, radi se o prometu usluga koji primalac sponzorstva vrši sponzoru, a koji je predmet oporezivanja PDV. Za sponozora je od značaja da troškovi reklame i propagande priznaju se kao rashod u poreskom bilansu u celosti.

Slično kao i drugi osnovi prihoda, benefiti koje profesionalni igrač primi od svog tima ili sponzora takođe se oporezuju po njihovoj tržišnoj vrednosti. Primera radi, ukoliko profesionalni ograč budu obezbeđeni letovi od strane tima ili proizvodi od sponzora, oni će biti oporezivani na način da će se kao poreska osnovica uzeti tržišna vrednost troškova leta ili proizvoda a obveznik poreza biće sam profesionalni igrač.

Iako trenutna situacija možda to ne zahteva, evidentno je da prilikom pregovaranja uslova njihovog sledećeg ugovora, profesionalni igrači ali i njihovi timovi trebaju da uposle podršku njihovih računovođa ili pravnih timova kako bi utvrdili koji je najbolji način da se struktuiraju različite forme prihoda koji se mogu javiti u budućnosti. U ovome pogledu, naša advokatska kancelarija, zajedno sa asistencijom ZSTAX pruža potpun set usluga neophodnih da se omogući optimala prava sigurnost u predstojećim godinama.