How Italy has reshaped tax incentives to attract professional athletes

Key takeaways of the special regime aimed at professional sportspersons in Italy. The article seeks to address the latest changes, introducing the uncertainties surrounding the application of the new measure, and their impact on the football industry.

In 2019, a special regulation to attract athletes from abroad by improving inward cross-border mobility was introduced to the tax scheme for inbound workers (the Regime). It allowed sports figures to transfer their tax residence to Italy enabling them to benefit from a partial tax exemption on domestic sourced compensation. The measure offered a two-fold tax break, by also granting employers (as football clubs) an indirect benefit through reduced wage withholding taxes and social contributions.

Most recently, Law Decree No. 21/2022 tightened access to the Regime, establishing that the tax exemption may only be applied where more specific objective and subjective criteria are met. The new regulation applies from tax year 2022, requiring athletes to check their eligibility for the tax benefit. Nevertheless, the former provisions continue to apply to player tax residents in Italy as of December 31st, 2021, until the expiry of their current contracts of employment

This article – written for and originally published on LawInSport – provides a snapshot of the Regime, through key takeaways of the special measure for sportspersons, and explains the latest changes introduced in 2022.