Issue Number:  2026-06

Consensus reached between Internal Revenue Service, Canada Revenue Agency, and Servicio de Administración Tributaria on sourcing of certain income related to FIFA World Cup 2026

In the interest of avoiding double taxation, the Canada Revenue Agency (CRA), Servicio de Administración Tributaria (SAT), and the Internal Revenue Service (IRS) have come to a consensus as to what constitutes a reasonable method to source and allocate prize money and other compensation received by participants of 2026 FIFA World Cup under each of their respective domestic laws. On income from FIFA to a particular participating member association (PMA) in respect of the 2026 FIFA World Cup games, the CRA and the IRS are of the view that the total compensation for a PMA should be allocated based on the games played in a specific jurisdiction relative to the total games played by the team throughout the tournament. The allocation is determined by multiplying the total earnings by the number of games played in each country and dividing the result by the total number of matches played across all three host countries.

The CRA, SAT and IRS also are of the view that the same allocation method could reasonably apply to downstream payments from a PMA. For example, if a PMA engages an independent contractor for services throughout the period in which the PMA plays, it would be reasonable for the same allocation factors to be used to allocate the independent contractor’s revenues. The same allocation may apply for payments to players engaged by the PMAs. For employees of the PMA that are not players, a time-based allocation factor would be reasonable. It should be noted that staff and coaches of the PMAs will not be subject to tax in Mexico.

Taxpayers are not bound by the above method of income allocation. They may choose an alternative method if their specific facts and circumstances justify it and if it more accurately reflects their situation. Further, a taxpayer’s use of the allocation method on which the three tax administrations have reached consensus provides no assurance that the taxpayer will not subsequently be audited by any of the three tax administrations. Taxpayers are encouraged to use allocation methods consistently across all host countries as well as their home countries.

The taxpayers are encouraged to apply an income allocation method consistently in their country of residence and across all three host countries (i.e., Canada, the United States and Mexico) which accords with their particular facts and circumstances and complies with all applicable domestic laws. Consistent filing in each jurisdiction will help reduce the risk of excess taxation and better allow for resolution under an applicable tax treaty of any cases of double taxation.

Back to top