Prepared by Carlo Romano, Marco Longobardi and Massimo Pinardi
The 2021 Budget Law (Law No. 178/2020, hereinafter “Budget Law 2021”) sets out relevant measures aimed at supporting sport by providing, on the one hand, tax and social security benefits so as to deal with the current health emergency, and on the other hand, significant financial resources addressing the organization of upcoming events in Italy (e.g. 2022 European Swimming Championships, 2026 Winter Olympics, 2026 Mediterranean Games). Furthermore, in the upcoming month of February, the application form for the tax credit (Article 81 of decree-law No. 107/2020) should be publicly made available. The latter should be relating to advertising investments, including sponsorships, borne by companies, non-commercial entities and self-employed in favour of leagues, professional sports clubs, clubs and Amateur Sports Associations (hereinafter “ASA”).
According to Ministry of Economy and Finance (hereinafter “MEF”) forecast, a fund of 50 million euros for the year 2021 and of further 50 million euros for the year 2022 is set up to grant an exemption, also partial, from the social security contribution for sports employment relationships involving, on one side, national sports federations, associated sports disciplines, sports promotion bodies, ASA and clubs (as employers), and, on the other side, athletes, coaches, instructors, technical directors, sports directors, athletic trainers and referees (as employees). The exemption at stake may be combined with other tax advantages. The technical report annexed to Budget Law 2021 limits the scope of the fund and of the tax break to the sole amateur sector (Article 1, paragraphs 34 and 35, of Budget Law 2021).
Suspension of payments
For national sports federations, sports promotion bodies, professional sport clubs, ASA and clubs with fiscal domicile, registered office or operational headquarters in Italy and operating in the field of ongoing sport competitions pursuant to the Decree of the President of the Council of Ministers, October 24th 2020, the following payments are suspended from January 1st 2021 to February 28th 2021:
- withholding taxes levied in the capacity of withholding agent;
- VAT due by January and February 2021;
- income taxes due by January and February 2021;
- social security and welfare contributions.
These payments shall be made (without penalties and interest) in a single instalment by May 30th, 2021 or by up to 24 monthly instalments starting from May 30th 2021 (Article 1, paragraphs 36 and 37, of Budget Law 2021).
Deduction for energy redevelopment and building renovation costs
The 65% tax deduction of costs for energy redevelopment of buildings (so-called eco-bonus), extended to December 31st 2021, is also covering the setup of solar panels ensuring hot water needs of sports facilities and swimming pools. There is also a 110% tax deduction (so-called super-bonus) granted to ASAs registered with the Italian National Olympic Committee register (hereinafter “CONI”) for costs incurred in for specific energy efficiency actions taken between July 1st 2020 and June 30th 2022, including demolition and reconstruction works. However, access to super-bonus is expressly limited to works concerning changing rooms (Article 1, paragraphs 58-60 and 66-75, of Budget Law 2021).
Promotion of basic sport activities
According to MEF forecast, a fund of 50 million euros is set up for 2021 in order to strengthen basic sport activities for all the population, as well as to optimize preventive measures of primary , secondary and tertiary prevention by means of physical exercise (Article 1, paragraphs 561-562, of Budget Law 2021).
Resources for 2022 European swimming championships
A 4-million-euro fund is set up for 2021 addressing the organization of the European swimming championships (Rome 2022). This significant amount will be granted to the Italian Swimming Federation, which may avail itself of an organizing committee. More specifically, the fund is aimed at covering organizational and development activities across Italy as well as in the Lazio Region and in the metropolitan area of Rome, including the removal of obstacles in the built environment in order to encourage the participation of Paralympic athletes (Article 1, paragraph 563, of Budget Law 2021).
Resources for 2026 20th Mediterranean Games
Resources amounting to 1.5 million euros for each year from 2021 through 2026 are reserved for the organizing committee of the 2026 20th Mediterranean Games in relation to planning and setting up (Article 1, paragraph 564, of Budget Law 2021).
Financing sports facilities – 2026 Olympic Games
With reference to all Olympic areas, Budget Law 2021 provides for the expenditure of 45 million euros for 2021, 50 million euros for 2022 and 2023, respectively, in order to finance sports facilities of the 2026 Winter Olympics in Lombardy, Veneto and in the autonomous provinces of Trento and Bolzano. The measures subject to financing and the sharing plan will be subsequently identified by one or more decrees of the Minister for Youth Policies and Sports, in agreement with MEF, and after prior common understanding with the locally involved government bodies. The event includes the 25th Winter Olympic Games and the 14th 2026 Paralympic Winter Games «Milano – Cortina» which will take place, respectively, from February 6th, 2026 to February 22th, 2026, and from March 6th, 2026 to March 15th, 2026, (Article 1, paragraphs 773-774, of Budget Law 2021).
Technical and amateur sports collaborations
For the purpose of streamlining tax legislation to Law No. 145/2018 (2019 Budget Law), as the latter reformed the scope of “Sport e Salute S.p.A.”, Budget Law 2021 amends Article 67, paragraph 1, let. m) of the Income Tax Code (hereinafter “ITC”). More specifically, Sport e Salute S.p.A. is included among the entities who, like CONI, the National Sports Federations and other sport promotion bodies, are authorized to pay travel allowances, lump sum expense refunds, prizes and fees in the direct exercise of amateur sport activities. Therefore, the aforementioned allowances and fees, pursuant to Article 69, paragraph 2, of ITC, do not count towards taxable income up to Euro 10,000 per tax period, even if paid by Sport and Salute S.p.A. (Article 1, paragraph 1121, of Budget Law 2021).
Tax credit for investments and sponsorships
Article 81 of decree-law No.104/2020 (so-called August Decree) provides for a tax credit granted to companies, self-employed workers and non-commercial entities who invested in advertising campaigns (including sponsorships) from July 1st, 2020 to December 31st, 2020 and relating to: i) leagues responsible for organizing national team championships in the context of the Olympic and Paralympic disciplines; ii) professional sports clubs; iii) CONI-registered amateur sports clubs and ASAs operating in youth sports among those admitted to the Olympic and Paralympic Games. Such tax credit – equal to 50% of advertising investments made in the aforementioned period – could be offsetting different taxes under Article 17 of Legislative Decree No. 241/1997, upon presentation of a specific request to the Department of Sport. The latter, jointly with MEF, will check the credit eligibility. The Decree of the President of the Council of Ministers implementing such measures, signed on December 30th, 2020, provides that the aforesaid requests shall be submitted by April 1st, 2021, by means of a form that the Department of Sport should made publicly available over the next month. Within 90 days following the deadline for the said requests, the list of recipients eligible for the tax credit will be published.
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