Recent developments in the football industry have been a catalyst for the global expansion of sports agents’ interests, who are increasingly managing a pool of athletes playing in major European leagues and competing in major European championships. This situation has made it necessary for sports agents to operate in countries where the exercise of their activity is defined by specific regulations, which require an analysis of the rules and restrictions of each jurisdiction.
In Italy, after the deregulation of the football agents’ sector by FIFA in 2015, a new legal framework regulating the activities of sports agents was established by Law No. 205/2017. The Italian Football Federation (FIGC), in accordance with the rules of the Italian National Olympic Committee (CONI), issued specific regulations for football agents, with the most important step in the reform being the double CONI-FIGC examination designed to ensure that successful candidates have the necessary knowledge in order to obtain a license to work as a sports agents in Italy and be included in the National Register of Sports Agents.
In general, sports agents may act on behalf of different market participants to whom they provide different types of services. However, the main activity of agents is the placement of football players with clubs (helping them to make the best decisions at different levels of their careers) and very often they also offer other services (for example, the management of image rights, sponsorship agreements, the recruitment of legal and tax advisors, etc.). In the context of the FIGC rules, football agents can be defined as persons who, on an occasional or regular basis, carry out one or more activities for a fee, such as bringing together parties interested in signing an agreement relating to the performance of sporting activity or negotiating and signing different types of agreements on behalf of a professional sports player.
In Italy, there are three main categories of professionals who can register with the National Register of Sports Agents:
- sports agents who have obtained full qualification in Italy by means of the qualifying examination;
- established sports agents, persons (e.g., Italians and EU citizens) who have passed examinations equivalent to those required in Italy for the exercise of sports agents’ activities and who are authorised to operate in a Member State of the European Union other than Italy;
- domiciled sports agents, persons who are already qualified to operate in another EU Member State or coming from non-EU countries where they are qualified to exercise sports agents’ activities and wish to operate in Italy in compliance with the specific regulatory requirements, but without having passed qualifying examinations equivalent to those required by Italian federal regulations.
From the above, it is evident the heterogeneity of the different sources of regulation of sports agents’ activities. In the specific case of domiciled sports agents, for the purpose of operating in Italy it is necessary that they are registered in the National Register under the conditions and requirements of the CONI regulations (art. 23) and of the FIGC regulations (art. 22), which allow them to carry out their activities only after having been domiciled with a sports agent or an established sports agent (also “domiciliary agent“) who is duly enrolled in the Register. Indeed, only domiciled sports agents who meet specific requirements are eligible to operate in the Italian market:
- they must have been residents in a country other than Italy for at least one year; and
- they have been authorised to work as a sports agent for at least one year by the relevant national sports association of that other country, in whose register they are properly listed; and
- they have received and actually performed at least two assignments in the previous last year.
The domiciliation of the activity with a sports agent or an established sports agent, which entails the obligation of the parties to deposit the professional collaboration agreement with the Federal Commission of Sports Agents and the registration of the domiciled sports agent in the appropriate list of the Federal Register, requires the presentation of the historical tax residence certificate and the documentation proving registration for at least one year in the register of the national sports federation of the foreign state of residence or by another national sports federation associated with FIFA. Thus, if the activity of a domiciled sports agent does not take place in the capacity of a natural person but is instead organised in corporate form, the agent must directly hold the majority of the share capital and have representation and management powers of the same company.
One of the most critical aspects is handling the invoicing of domiciled sports agents‘ fees. It is possible, as the recent joint CONI-FIGC communication of 9 August 2022 has made clear, that:
- the domiciliary agent invoices the domiciled agent for the agreed remuneration for the activities performed on his behalf under the joint professional agreement and the domiciled agent invoices the footballer or sports club for the remuneration agreed in the professional mandate; or
- each party charges the client directly for the consideration due.
Notwithstanding the foregoing, the domiciliary agent remains obliged to collect all fees resulting from the appointment of the domiciled sports agent by the football player or the sports club and, consequently, to pay the domiciled sports agent the share of the fees due to him in accordance with the terms and conditions set out in the professional agreement. The domiciliary agent shall also be jointly liable with the domiciled sports agent for violations and irregularities committed by the latter in the exercise of his activities in Italy, with reference to compliance with national laws and regulations. Since the former shall be obliged to act jointly with the domiciled sports agent within the scope of the mandate, it is understood that the domiciliary agent shall also be obliged to act in accordance with the instructions of the domiciled sports agent. However, each party will retain its own separate responsibilities with respect to its tax obligations, including the payment of taxes and withholding taxes.
As far as the tax aspects of the domiciliation are concerned, it has been generally accepted that the fees paid are not subject to VAT in Italy and that the sports club does not withhold taxes on the part of the fee attributable to the domiciled sports agent, provided that the agent holds a certificate of residence issued by the foreign tax authority and that the overall factual elements do not show the conditions for the establishment of a fixed base of the same natural person in Italy. It is understood that where the domiciled agent carries out a series of domestic transactions with constant regularity over time, a fixed place of business could be identified with the aim of organizing and managing, in his own interest, a physical presence in Italy in order to maintain social and economic relations for exercising an independent activity. In such case, the payer (i.e., the sports club) would then have to apply a 20% withholding tax on the part of the remuneration paid to the domiciled sports agent, which will of course be fully relevant for VAT purposes. Instead, if the payment is made by the player no tax is withheld at source and the domiciled sports agent is required to pay the full amount due in his income tax declaration filed in Italy.
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