International acts who perform in the U.K. will likely face stricter tax liability, following a recent High Court ruling concerning American tennis great Andre Agassi.

LONDON--International acts who perform in the U.K. will likely face stricter tax liability, following a recent High Court ruling concerning American tennis great Andre Agassi.

The Inland Revenue has ruled that Agassi must pay income taxes of £27,520, based on endorsement income of £23,750 from German company Head Sports and £102,158 from U.S. sportswear giant Nike for the tax year 1998-99.

The court reasoned that Agassi was liable for U.K. taxes because the money he made from endorsements for Nike and Head were due in part from exposure he gets from playing in high-profile tournaments like Wimbledon.

The court rejected Agassi's argument that he, Nike and Head don't have a tax presence in the U.K.

Lawyers say the ruling will significantly impact the tax liability of international athletes and entertainers who appear in the U.K. because their lucrative endorsement deals from foreign sponsors will now likely be scrutinized by the British tax-man.

In dismissing Agassi's challenge, Mr Justice Lightman wrote: "It is common ground that section 556 of the 1988 Income Tax Act subjects non-residents to tax, if the payment is made by an English company or a foreign company with a tax presence here. The question raised is whether they are intended to be excused from liability if, instead, they are paid by a foreign company with no tax presence here.

"The plain and obvious intention of the legislature was to impose an obligation on the person making the payment irrespective of his tax presence here."

Agassi is expected to appeal the ruling.