As commonly know, in Italy the sports industry – and especially soccer – represents an important source of wealth for the Country.
As a consequence of the potential growth of this industry, the Italian legislator introduced with the Law decree no. 34/2019 special tax incentives for athletes and other inbound workers who transfer their tax residences to Italy.
Since then, a lot of new and updated provisions have been introduced.
First of all, to be admitted to this "special regime" the athletes have to meet the following conditions:
- lived as Italian tax nonresidents for the previous two years before transferring their tax residences to Italy;
- qualify as Italian tax residents and plan to remain in Italy for the next two years; and
- perform the main work activity in Italy.
The athletes who transfer their tax residence to Italy could be subject to Italian personal income tax on 50% of their employment income from Italian sports clubs, while the remaining 50% of income from Italian sports club would be exempt from taxation.
The duration of this special tax regime is limited to five years.
Besides, athletes will however be required to pay a proportional levy equal to 0,5% of the taxable income if they want to apply this regime. The proceeds of this tax will be used to provide support to younger athletes in the sports sector.
Concerning the "fringe benefits" related to the working relationship received by the professional athlete, they are included in the special tax regime.
The same consideration applies to the sponsorships, merchandising and endorsement agreements of the professional athletes under the direct control of the Italian sports club.
But it is worth underlying that a recent decree (Law decree no. 21/2022) provided that the special tax regime will apply only in case of income produced by special categories and so to athletes operating within the disciplines recognized by the Italian National Olympic Committee (such as soccer) and national sports federations and individual leagues that have achieved professional qualification.
In particular, the regime operates for taxpayers who are 20 years old or older and have an income of more than 1,000,000 euros, if the professional qualification was obtained before 1990; if after 1990 (such as basketball), the total income must be more than 500,000 euros.
Also, the new rules do not apply on existing contracts, for which, until they expire, the old rules continues to apply.
In conclusion, it is still very convenient for the athletes to take advantage of the big fiscal opportunities related to the decision to move to work and play to Italy in the near future and at the same time it represents a unique chance for Italy to attract more people with massive assets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
