Taxes and support for the sports sector: new contract requirements for professional athletes and clubs


Giorgio Vaselli
Special counsel |

Italy will soon issue the Prime Ministerial Decree (the “DPCM”) which implements a mandatory contribution of 0.5% of the taxable income of professional athletes and sportspeople. The proceeds of this tax will be used to provide support to younger athletes in the sports sector.

The DPCM applies to sportspeople making use of Italy’s tax incentive programme for ‘inbound employees’ to professional athletes, which provides a 50% tax reduction on their employment income (and similar income). In order to qualify for the programme, sportspeople must belong to Italy’s FIGC (football), FIP (basketball), FCI (cycling) and FIG (golf) leagues. The tax provisions are valid for five years and can be extended for a further five years under certain conditions.

The DPCM confirms the strategic importance of these provisions relating to ‘inbound employees’ for the Italian sports industry and clarifies doubts raised by a much-criticized Tax Circular published in December which, erroneously, specified that the ‘inbound employees’ provisions would not be applicable until the DPCM had been published.

In a nutshell, the DPCM provides that:

  • professional athletes must pay the Contribution annually within the timeframe for the payment of the balance of their personal income tax for the relevant year (generally, by 30 June of the following year)
  • the ‘inbound employees’ regime can also apply to the year 2019, provided the payment of the Contribution is made by March 15 2021
  • professional athletes must advise the Ministerial Sports Department of their payment (using a special online form that will soon be available). The DPCM also sets out that the professional athlete concerned must provide the name of his/her employer, along with other details. Any changes to the employer/club during the course of the year must also be duly advised.

Non or insufficient payment of the Contribution within the deadline will result in forfeiture of the benefits of the ‘inbound employees’ regime. It is therefore advisable that the contracts between clubs and the athletes duly specify the timeframe and responsibility for this payment. This aspect will certainly require additional clauses in the contract between the parties concerned. Any non or insufficient payment of the Contribution can probably be paid at a later date subject to the payment of a penalty.

The athletes and clubs concerned will be able to negotiate the various aspects involved. This includes who will pay the Contribution, who will be responsible for advising the Ministerial Sports Department (as well as providing details of any amendments), how a transfer of the athlete to another club will be handled (especially when this involves a transfer abroad and/or takes place during the course of a current year).

Lawyers and tax advisers will need to revise the standard clauses of the employment contracts between clubs and professional athletes. The first opinions on what form these will take should be available by 15 March 2021 when the first payment of the tax is due for the year 2019.

Withers’ Tax and Sports Teams

Cliccare qui per leggere la versione in italiano.

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