Non-resident sports agents and permanent establishment in Italy: practical takeaways from a landmark ruling

The recently published reasoning behind the judgement acquitting a top-tier international sports agent of tax-related charges - on the basis that 'the [criminal] fact does not exist' (il fatto non sussiste) - paves the path for non-resident sports agencies operating in Italy.

For the first time, an Italian Judge has clearly delineated the boundary between international agency activity and domestic tax obligations. The ruling clarifies that the absence of a stable presence in Italy, combined with the mere execution of contracts in Italy with Italian counterparties, does not give rise to Italian tax‑filing obligations for non‑resident agents.

Background

The international sports agent was charged with failing to file tax returns in Italy under Article 5 of Legislative Decree no. 74/2000. The Public Prosecutor argued that, as director of four non-resident companies, the agent was required to file Italian tax returns since such companies allegedly had hidden permanent establishment in the country.

According to the prosecution, the agent's involvement in negotiating and executing agreements for player transfers, employment contracts, and image-rights deals with Italian clubs amounted to a personal permanent establishment, generating taxable income in Italy.

The Judge's reasoning

The Judge acquitted the sports agent, concluding that the evidence did not demonstrate the existence of the objective element of the alleged offence – namely, the existence of a personal permanent establishment in Italy. 

To assess whether such structure existed, the Judge identified two cumulative requirements: 

• stable and continuous presence in Italy of the individual, acting on behalf of the non-resident company; and
• habitual finalisation of contracts in Italy, meaning not merely signing contracts in the country, but carrying out the substantive negotiations that lead to their finalisation on Italian territory.

The Judge found that neither requirement was met.

Lack of stable presence in Italy

The judgment highlights that the sports agent’s presence in Italy was occasional and limited. In particular, the number of days spent in the country was minimal, and there was no supporting infrastructure (such as offices, abode, staff) that would indicate a permanent professional establishment. In the absence of such elements, the Judge upheld that the sports agent does not qualify as an individual continuously operating in Italy on behalf of non-resident companies and, consequently, no stable presence could be implied.

Determining where the contract is negotiated

The Judge adopted a substantive approach to determining where the Italian-football-related contracts were in effect finalised: the core aspect is where the negotiation creating economic value actually takes place, not where the contract is undersigned or whether Italian parties are involved. In this case, no evidence showed that the crucial phases of the negotiations had occurred in Italy, other than occasionally. On the contrary, the activities appeared to unfold across several countries, with the signature in Italy merely representing the final step in a broader international negotiation process.

Recent regulatory update on permanent establishment for sports agents

Decree no. 218/2025 on sports agents has introduced an important clarification: the new domiciliation regime (the so-called domiciliazione) - allowing non-resident agents to operate in Italy for up to six months per calendar year through collaboration with an agent registered in the Italian National Register - does not in fact create a permanent establishment. This provision appears to introduce a presumption that domiciliation alone (and activities performed under such regime) do not constitute a permanent establishment.

The Decree therefore strengthens the position of a non‑resident sports agent working in Italy under the domiciliation regime, providing a 'safe harbour' with respect to this specific connecting factor, helping to diminish legal uncertainty.

However, the provision does not exclude that a sports agent may still be found to have a permanent establishment in Italy. It simply clarifies that such a finding cannot be based solely on domiciliation. Consequently, after the Decree's entry into force, any assessment must still consider the overall factual context, consistent with the approach adopted by the Judge in the case discussed above.

Concluding remarks

• Limited and occasional presence in a country, without offices, staff, or other infrastructure, does not typically amount to a personal permanent establishment for a sports agent.
• The place where a contract is undersigned is not decisive; what matters is where the substantive negotiations occur and where economic value is actually created.
• A finding of permanent establishment must rely on a factual assessment, considering the agent’s actual activity and presence, rather than formalities.
• Under the new regulatory framework, domiciliation alone does not create a permanent establishment.

With contributions from Armando Simbari.