The home countries of the international cricketers playing for the Indian Premier League (IPL) this year would rake in about $6 million as taxes, about three times the sum Indian taxmen would get from these players.
Assuming that these cricketers are in the highest tax brackets of their countries, the Australian exchequer would get richer by nearly $2 million from what IPL pays to nine Australian cricketers. The three highest paid Aussie players, Andrew Symonds, Brett Lee and Adam Gilchrist, will contribute over 52% of the sum.
The South African government will earn close to $1.3 million, followed by Sri Lankan and Pakistani governments that are likely to mop up close to a million dollars each from the IPL earnings.
The three most sought after Sri Lankan players?Muttiah Muralitharan, Tillekeratne Dilshan and Farveez Maharoof?would pay almost 58% of the tax monies their government would garner from IPL.
Similarly, for Pakistan, Shoaib Akhtar, Umar Gul and Mohd Asif may pitch in over $600,000, which is more than 60% of the IPL-related tax outgo to their home country.
Incidentally, when it comes to tax, Pakistani players have more lose than their counterparts in Australia, South Africa, Sri Lanka and New Zealand. ?India has double tax avoidance agreements with these four countries, but not with Pakistan. Thus, while other players can avail of tax credits (in their respective countries) for the entire 10% tax they would pay to India, Pakistanis do not have that cushion,? said Amitabh Singh, tax partner, Ernst & Young.
On how much the Indian coffers will be getting from the IPL venture of international players, Krishan Malhotra, executive director, PricewaterhouseCoopers, said: ?According to the Income-Tax Act (ITA), India, the IPL international players are liable to pay taxes in the country as they are carrying out activities on Indian soil. Since they qualify as non-resident sports persons, they should be taxed at 10% under section 115BBA of ITA.? Accordingly, the Indian exchequer will earn more than $2 million from taxes paid by foreign cricketers from IPL earnings, half from Australian and South African players alone.
