The commercialisation of sports TV rights related to Italian football matches Tax issues from an Italian point of view by Francesca Nigro

The commercialisation of sports TV rights related to Italian football matches

 

Tax issues from an Italian point of view

 

by Francesca Nigro[1]

 

The following comments are aimed at pointing out some particular tax issues to be taken into account in the commercialisation of sports TV rights related to football matches involving an Italian football team. More particularly, the analysis focuses on the following scenarios:

 

a    the commercialisation of sports TV rights involving only entities resident in Italy for tax purposes (the Italian Football Team or Club, the Italian football league “Lega Calcio” and the Italian Broadcaster);

 

b    the commercialisation of sports TV rights involving the Italian Football Team, UEFA and the Italian Broadcaster;

 

c    the commercialisation of sports TV rights involving the Italian National Football Club, FIFA and the Italian Broadcaster.

 

In addition, in all the above cases, the role of agents in such commercialisation will be considered.

 

The commercialisation of sports TV rights involving only entities resident in Italy for tax purposes

 

In order to understand more fully the tax implications in Italy of the commercialisation of sports TV rights, it is fundamental firstly to identify the role of Lega Calcio in such commercialisation also from a legal perspective.

 

In this regard, reference must be made to Legislative Decree 9 January 2008 no. 9 (“Decreto Melandri”)[2], which introduced the principle of co-ownership of broadcasting rights between the organiser of the competition (Lega Calcio) and the organisers of the events (the Football Teams or Clubs).

 

The audiovisual exclusive rights to sports events to which the co-ownership refers according to article 2, lett. o of Decreto Melandri, are the following:

 

a    setting and playback, direct or indirect, temporary or permanent;

 

b    public disclosure of filming, fixations and reproductions;

 

c    distribution, rental and lending of the original and copies of footage, fixations or reproductions;

 

d    development or reproduction, even partial, of emissions for new programs or new fixations;

 

e    advertising and promotional uses;

 

f     archival storage.

 

The role of an agent possibly acting on behalf of Lega Calcio in respect of such commercialisation needs to be examined in the context of the above considerations.

VAT issues

 

The sale of television rights is treated in the same way as the sale of copyrights, and, therefore, pursuant to art. 3, paragraph 2, no 2 of Presidential Decree no 633/72 (“Italian VAT Code”) is classified as a provision of “services“, if made for consideration[3]. The normal VAT rate of 21% is applicable.

 

According to art. 6 of the Italian VAT Code, invoices related to the supply of services should be issued on the date on which the due consideration is paid.

 

Taking into account the above and considering the co-ownership of broadcasting rights between Lega Calcio and the Football Team, it was not clear whether the invoices to the Broadcasters had to be issued by Lega Calcio or directly by the Football Team. In other words, considering that Lega Calcio is the entity that usually negotiates the sale of sports TV rights with the Broadcaster, there was the need to clarify whether the legal relationship between the Football Team and Lega Calcio constituted a mandate with or without power of attorney.

 

The Italian Revenue (“Agenzia Entrate”), in response to a tax ruling promoted by Lega Calcio[4], clarified that the legal relationship between Lega Calcio and the Football Teams in relation to the commercialisation of sports TV rights has to be considered as a mandate with power of attorney, with the consequence that only the Football Teams are entitled to invoice the sale of the subject rights to the TV Broadcaster.[5]

 

This means that even if Lega Calcio is the entity which is entitled to negotiate the agreements with the TV Broadcaster, only the Football Teams have the right to issue the invoices related to such commercialisation of sports TV rights.

 

In the event that Lega Calcio employs an agent acting as a mere intermediary in the commercialisation of these sports TV rights, the services provided by such agent will be subject to the ordinary 21% VAT rate; therefore the agent will issue an invoice to Lega Calcio (more precisely to Lega Calcio Service S.p.A., the company entirely controlled by Lega Calcio whose business purpose consists of, among other things, the commercialisation of these rights) and Lega Calcio (i.e. Lega Calcio Service S.p.A.) will be entitled to deduct VAT.

 

Income tax issues

 

The entities involved in the commercialisation of sports TV rights (the Football Teams[6] and the TV Broadcaster) are all companies limited by shares and are consequently subject both to corporate income tax (IRES) and to regional tax on productive activities (IRAP).

 

The general rules regarding the tax adjustments due in order to obtain the taxable basis of IRES and IRAP (which are common rules for all companies limited by shares) are also applicable to the subjects in question.

 

There are no particular issues to be highlighted. This means that revenues related to the commercialisation of sports TV rights invoiced by Football Teams are deemed to be “business income” and are subject to the rules provided by:

 

–    “Titolo II, Capo I e Capo II” of the Italian Income Tax Code[7] (in substance, the rules for the computation of the income taxable base for companies and commercial entities resident in Italy);

 

–    articles 5 and 11 of Legislative Decree no. 446/1997 (in substance, the rules for the computation of the IRAP taxable base in relation to companies and commercial entities resident in Italy).

 

In the event that Lega Calcio (read Lega Calcio Service S.p.A.) employs an agent, the latter will be paid a commission for its performance that will be subject to IRES and IRAP according to the above mentioned rules.

 

The commercialisation of sports TV rights related to European football matches; tax issues from an Italian point of view.

The commercialisation of sports TV rights related to European Football matches involves UEFA[8] (Union des Associations Européennes de Football), the entity with the organisational and administrative responsibility for the UEFA Champions League.

 

The following comments refer to the highest European Football competition, the UEFA Champions League, as regulated in the specific UEFA Regulations[9].

 

The tax implications of the commercialisation of sports TV rights involving the Italian Football Team, UEFA and the Broadcaster (both resident in Italy and abroad) have to be analysed taking into account the role of UEFA in such commercialisation.

 

In this regard, article 28.02 of the Regulations of the UEFA Champions League states clearly that:

 

UEFA is the exclusive, absolute legal and beneficial owner of the commercial rights … (omissis) UEFA expressly reserves all commercial rights and is exclusively entitled to exploit, retain and distribute all revenues derived from the exploitation of such commercial rights.

 

Moreover article. 27.06 of the subject Regulations provides that:

 

      a    “75% of the revenue received by UEFA from television and sponsorship (including without limitation, licensing and merchandising) contracts will be paid to the 32 clubs taking part in the UEFA Champions League group matches.

 

      b    25% of the revenue received by UEFA from television and sponsorship (including without limitation, licensing and merchandising) will remain with UEFA to cover organisational and administrative costs and solidarity payments to its member associations…”

 

The commercial rights to which the UEFA Regulations refer are, as stated in article 28,

 

any and all commercial and media rights and opportunities in and in relation to the UEFA Champions League and the play-offs (including, without limitation, all UEFA Champions League and play-off matches), including, without limitation, media rights, marketing rights and data rights.

 

Taking into account the above, UEFA could employ an independent agent in relation to such commercialisation. The agent could be a mere intermediary or the licensee of the rights in question and subsequently sublicense them to the Broadcaster.

 

VAT issues

The provision of the Regulations of the UEFA Champions Leagues which states that UEFA is the beneficial owner of the commercial rights (and therefore of the revenues deriving from their exploitation) clearly points out the different role of UEFA with respect to Lega Calcio. In fact, revenues deriving from the exploitation of such commercial rights are taxed at the level of UEFA before being partly distributed to Football Teams (and subsequently taxed at the level of the relevant Football Teams).

 

This means that invoices related to such proceeds are firstly issued by UEFA to the Broadcaster and subsequently issued by the Football Teams to UEFA.

 

As stated above, invoices issued by UEFA to the Italian Broadcaster will be subject to VAT in Italy. In fact, as already explained, the commercialisation of sports TV rights is deemed a provision of services pursuant to art. 3, paragraph 2, no. 2 of the Italian VAT Code and services are deemed to be supplied in Italy for VAT purposes if they are rendered to a VAT taxable Italian entity (the Broadcaster) according to art. 7-ter of the Italian VAT Code.[10]

 

This means that once the Broadcaster receives the debit note for the sale of sports TV rights, it will have to register the invoice both in the input tax records and in the output tax records according to article 17 of the Italian VAT Code.

 

In the event that UEFA employs an agent to act as the first licensee of the rights in question and the sublicensor of them to the Italian Broadcaster, based on the above comments, royalties paid by the Broadcaster to the agent will be subject to VAT in Italy, no matter where the agent is fiscally resident. Therefore, the Broadcaster, as previously explained, will have to register the invoice both in the input tax records and in the output tax records according to article 17 of the Italian VAT Code.[11]

 

The VAT regime of invoicing by the Football Teams to UEFA was examined by the Italian Revenue in the Ministerial Resolution dated 8 August 2003. According to the Tax Administration, the transaction between UEFA and the Football Teams is deemed as a waiver of the related sports TV rights and, therefore, must be considered a disposal of the rights in question according to art. 3, paragraph 2, no. 2 of the Italian VAT Code.

 

Therefore, considering that such services, according to art. 7-ter of the Italian VAT Code are not subject to VAT in Italy since they are rendered to a VAT entity resident abroad (in Switzerland), the Italian Football Teams will issue a simple debit note to UEFA with no VAT charge.[12]

 

Income tax issues

 

The case in question assumes that proceeds deriving from the exploitation of sports TV rights are paid by the Italian Broadcaster to UEFA and by UEFA to the Italian Football Team. The following comments therefore focus on both income streams.

 

Fees to be paid to UEFA (a non-resident entity) by the Italian Broadcaster are deemed royalties in respect to the acquired TV right to broadcast the relevant football matches. According to the combined rules of article 23 of the Italian Income Tax Code and 25, paragraph 4 of Presidential Decree no. 600/1973, such royalties are subject to a 30% withholding tax to be executed by the Broadcaster at the moment of payment. Nevertheless the Italy-Switzerland Tax Convention may apply and UEFA may request the Broadcaster to apply the reduced withholding tax of 5%  provided by article 12 with regards to royalties.

 

For the reduced withholding tax to apply, UEFA, before any payments are made, must provide the Italian Broadcaster with a certification issued by the Swiss Revenue stating that it is fiscally resident in Switzerland, is subject to income tax in Switzerland and is the beneficial owner of the royalties in question.[13]

 

In the event that UEFA utilizes an agent, acting as licensee and sublicensor of the rights in question, the same withholding taxes referred to above will apply to the royalties paid to the agent (of course assuming that the agent is fiscally resident in Switzerland; if this is not the case, the relevant Tax Treaty entered into by Italy and the State of residence of the agent will apply).[14]

 

As clarified above in the paragraph “VAT issues”, fees to be paid by UEFA to the Football Teams are deemed consideration for their waiver of the rights to exploit sports TV rights in relation to the Champions League. Such fees are considered as business profits and, according to article 7 of the Italy-Switzerland Tax Convention, no withholding tax in Switzerland is due (provided that, of course, the Italian Football Teams to which the fees are paid do not have a permanent establishment in Switzerland).

 

Therefore, despite any possible withholding tax at source provided by the Swiss Tax Law in relation to the fees in question, the Italian Football teams may request the application of art. 7 of the Italy-Switzerland Tax Convention by providing UEFA, before any payments are made, with a certification issued by the Italian Revenue stating that they are joint stock companies fiscally resident in Italy, subject to income tax in Italy and that they are the beneficial owners of the fees in question.

 

Such fees will be subsequently taxed in Italy at the level of the Football Teams by virtue of the world wide tax principle and will be computed in the IRES and IRAP taxable basis.

 

The commercialisation of sports TV rights related to international football matches; tax issues from the Italian point of view

The commercialisation of sports TV rights related to international football matches involves FIFA (Fédération Internationale de Football Association)[15], the entity with organisational and administrative responsibility for the FIFA World Cup.

 

The following comments refer to the highest international football competition for national teams, the FIFA World Cup, as regulated in the specific FIFA World Cup Regulations[16].

 

The tax implications of the commercialisation of sports TV rights involving the Italian National Football Federation (FIGC)[17], FIFA and the Italian Broadcaster have to be analysed taking into account the role of FIFA in such commercialisation. For this purpose, it is important to refer to both the FIFA Statutes in force and the Regulations 2010 FIFA World Cup (together with the Regulations 2014 FIFA World Cup in force for next World Cup).

 

In this regard, art. 72 of the FIFA Statutes states that FIFA, its Members and the Confederations, are:

 

the original owners of all the rightsemanating from competition and other events coming under their respective jurisdiction”.

 

Moreover, art. 14 of the Regulations 2010 FIFA World Cup provides that:

 

FIFA owns and controls all commercial rights in relation to the FIFA World Cup”.

 

More clearly art. 15 of the Regulations 2014 FIFA World Cup points out that:

 

FIFA is the original owner of all the rights emanating from the FIFA World Cup and any other related events coming under its jurisdiction”.

 

Article 15 of the Regulations 2014 FIFA World Cup clarifies that the rights in question :

 

“include, among others, all kinds of financial rights, audiovisual and radio recording, reproduction and broadcasting rights, multimedia rights, marketing and promotional rights and incorporeal rights (such as those pertaining to emblems) as well as rights arising under copyright law whether currently existing or created in the future subject to any provision as set forth in specific regulations.

 

Please note that in this scenario FIFA could again employ an independent agent for the commercialisation of these rights acting as the licensee and sublicensor of these rights or as a mere intermediary in the commercialisation of such rights.

 

The consideration paid by FIFA to its members, such as in our case the FIGC, are both prizes related to the participation of the national football teams to the FIFA World Cup and general contributions for promoting the game of football also in terms of improving the administrative and technical infrastructure for its development.

 

VAT issues

 

The provisions of the FIFA Statutes and FIFA Regulations of the FIFA World Cup (both in force for the 2010 World Cup and the 2014 World Cup) not only state that FIFA is the owner of the commercial rights (and therefore of the revenues deriving from their exploitation) but, with reference to the World Cup, FIFA is the original owner of such rights since it owns and controls them in an exclusive way.

 

This also explains the reason why, within the World Cup, there is no reallocation of the revenues deriving from the commercialisation of such rights to the national members (i.e. FIGC). In fact, payments by FIFA to its members relate to prizes and contributions.

 

As already stated, the above invoicing by FIFA to the Italian Broadcaster will be subject to VAT in Italy. In fact, as already explained above in the second paragraph “VAT issues”, the commercialisation of sports TV rights is deemed a provision of services pursuant to art. 3, paragraph 2, no. 2 of the Italian VAT Code and services are deemed to be supplied in Italy for VAT purposes if they are rendered to a VAT taxable Italian entity (the Broadcaster) according to art. 7-ter of the Italian VAT Code.[18]

 

This means that once the Italian Broadcaster receives the debit note for the sale of sports TV rights, it will have to register the invoice both in the input tax records and in the output tax records according to article 17 of the Italian VAT Code.

 

In the event that FIFA employs an agent for the commercialisation of the rights in question, please refer to our previous comments in respect of UEFA (second paragraph “VAT issues” above).

 

Payments made by FIFA to FIGC are of a different nature. In some cases, the payments in question must be deemed considerations related to the participation of the National Football team in the World Cup and in some other cases the payments in question are real contributions made for promoting the game of football and its development.

 

In order to determine the VAT regime of such payments, it is fundamental to verify whether they refer to a supply of services rendered by FIGC or not. In fact, only payments made in relation to an obligation of the entity benefiting from the payments are subject to VAT.[19] In other cases, the payments are deemed a donation and therefore fall outside the scope of VAT.[20]

 

With reference to the case in question, prizes paid to FIGC in relation to the obligation assumed by the Italian Football Team to participate in the World Cup and play the matches are subject to VAT, while any other contribution paid by FIFA, without having FIGC obliging itself to provide a specific service, fall outside the scope of VAT.

 

For the territoriality of the mentioned prizes, reference must be made to art. 7-ter of the Italian VAT Code (the related subject services are not regulated by any specific rule making an exception to the general rule for the territoriality of services provided by the mentioned art. 7-ter of the Italian VAT Code). Taking into account the fact that according to art. 7-ter, the provision of services is subject to VAT in Italy if the customer is an Italian VAT subject, the prizes in question are not subject to VAT in Italy (the customer is, in fact, FIFA, an entity resident abroad and with no Italian VAT code).

 

This means that in relation to those prizes FIGC will issue a simple debit note to FIFA with no VAT charge.

 

Income tax issues

 

The circumstances in question assume that proceeds deriving from the exploitation of sports TV rights are paid by the Italian Broadcaster to FIFA. Payments paid by FIFA to its members are mostly prizes and contributions and do not refer to the revenues related to the commercialisation of such sports TV rights. The following comments therefore focus on both flows of income.

 

Fees to be paid to FIFA (a non-resident entity) by the Italian Broadcaster are deemed royalties in respect of the acquired TV right to broadcast the relevant football matches. According to the combined rules of articles 23 of the Italian Income Tax Code and 25, paragraph 4 of Presidential Decree no 600/1973, such royalties are subject to a 30% withholding tax to be withheld by the Italian Broadcaster at the moment of payment. Nevertheless the Italy-Switzerland Tax Convention may apply and FIFA may request the Broadcaster to execute the reduced withholding tax of 5%  provided by article 12 with regards to royalties.

 

For the application of the reduced withholding tax, FIFA, before any payments are made, must provide the Italian Broadcaster with a certification issued by the Swiss Revenue stating that it is fiscally resident in Switzerland, is subject to income tax in Switzerland and is the beneficial owner of the royalties in question.[21]

 

In the event that FIFA employs an agent for the commercialisation of the rights in question, please refer to our previous comments referred to the case of UEFA in paragraph 2.2.

 

As already clarified, fees to be paid by FIFA to FIGC are deemed considerations for the obligations assumed by FIGC to permit the Italian Football Team to participate in the World Cup and contributions to the development and promotion of the game of football.

 

In both cases, the fees are considered as business profits and, according to article 7 of the Italy-Switzerland Tax Convention, no withholding tax in Switzerland is due. Therefore, despite any possible withholding tax at source provided by the Swiss Tax Law in relation to the fees in question, FIGC may request the application of art. 7 of the Italy-Switzerland Tax Convention by providing FIFA, before any payments are made, with a certification issued by the Italian Revenue stating that it is a legal entity fiscally resident in Italy, is subject to income tax in Italy and is the beneficial owner of the fees in question.

 

The fees in question will subsequently be taxed in Italy at the level of FIGC by virtue of the world wide tax principle and will be computed in the IRES and IRAP taxable basis.

 

Comments on possible tax planning

 

Any possible tax planning concerning revenues arising from the commercialisation of sports TV rights requires a structure able to locate such income in a tax haven or, more generally, in a state with a lower taxation rate than Italy.

 

This could be theoretically realised by transferring the title to these rights to a controlled entity located in the chosen State (in such a way taxable revenues deriving from the exploitation of the TV rights would be realised by the foreign entity and would be subject to more favourable taxation than would be the case in Italy). However, as pointed out in the following remarks, such structures present many weak points and may be challenged by the Italian Tax Administration on more than one ground.

 

Firstly, the transfer of the rights to the entity located abroad may trigger some significant tax issues. In fact, such transfer may be executed by means of a sale or a contribution in kind. Both the sale and the contribution in kind of the possessory title to these rights are transactions made in return for a consideration and generate a taxable capital gain in Italy.[22]

 

In fact, if the price agreed for the transfer or the contribution – on the basis of which the capital gain is computed, resulting in the difference between such price and the “tax cost” of the rights – is lower than the fair market value, the Italian Tax Administration may deem the transaction as evasive on the basis of both the anti-avoidance rule provided by article 37bis of Presidential Decree no. 600/1973[23] and article 9 of the Italian Income Tax Code[24]. Considering the foregoing, it is clear that the transaction (at market value) would imply a significant capital gain in Italy and for this reason may be less appealing.

 

As an alternative, the title to the rights in question may be contributed as part of a going concern. In this case, the contribution of a going concern is a neutral transaction from an income tax point of view pursuant to article 179 of the Italian Income Tax Code if the foreign entity is located in a State member of the EU. This means that the contributor company would not realise any taxable gain further to the transaction. Nevertheless, it is fundamental that the contribution is actually intrinsic to the going concern[25] and is not deemed a contribution of single assets by the Italian tax authorities (which may consequently tax the presumed capital gain arising from the transfer).

 

Moreover, once the structure has been implemented (and the title to these rights has been transferred to the foreign entity) it is fundamental that the foreign entity is considered not only formally, but also in substance, fiscally resident abroad. Therefore, in the first instance, it is fundamental that the foreign entity does not control any Italian resident company and the majority of the members of the board of directors are not Italian resident individuals in order for presumption of the so called “esterovestizione”[26] not to apply. Moreover, the place of management of the foreign entity must be actually situated in the foreign country and the related business activity must be effectively carried on abroad.[27]

 

Please note that recently the Italian Tax Administration has assumed tax residence in Italy with reference to several structures having similar features to the one described above, stating, among other things, that the effective place of management of the foreign entity was situated in Italy.

 

Therefore, any tax planning involving structures with foreign entities should be assessed in light of the above considerations.

 

 



[1] CBA Studio Legale e Tributario, Milan.

[2] Published in the Official Gazzette no 93 of 19 April 2008.

[3] In fact Ministerial Resolution no 98/E of 28 June 2000 clarified that transactions related to immaterial or similar rights are deemed to be transactions concerning copyrights to which article 3 paragraph 2, no 2 of Italian VAT Code is applicable.

[4] Italian Revenue, Instance no 212 of 17 June 2010 (Interpello art. 11, L. 27 July 2000), registered at protocol no 954-367/2010, Lega Nazionale Professionisti.

[5] On the other hand, if the juridical relation was deemed to be a mandate without power of attorney, invoices to the TV Broadcaster should have been issued by Lega Calcio and the Football Teams would have subsequently invoiced their part of TV rights to Lega Calcio.

 

[6] In fact, according to art. 10 of L. 91/1981, professional athletes may enter into contracts only with clubs which are either joint stock companies or limited liability company.

[7] The Italian Income Tax Code is the Presidential Decree no. 917/1986.

[8] UEFA (Union des Associations Européennes de Football) is incorporated in Nyon (CH). Paragraph 13 of the European Commission decision 2003/778/EC clarifies: “UEFA has organisational and administrative responsibility for the UEFA Champions League. UEFA conducts the draw procedure and approves the participants. UEFA appoints referees, match delegates and referee observers and covers their expenses. It is the disciplinary body supervising and enforcing all aspects of the competition. UEFA selects and appoints a wide range of third party service providers to provide services that are required in connection with a match. The range of services that UEFA arranges include: product development, sales, after sales services and client relations with broadcasters, sponsors, suppliers, licensees and participating clubs, media services (booking of commercial spots and broadcast sponsorship throughout the world), legal services, television production services, auditing and monitoring of UEFA Champions League television programs throughout the world, research services, operational implementation of the commercial concept, hospitality services, financial and administrative services, and statistical and information services (competition analysis).”

[9] Regulations of the UEFA Champions League 2011/2012, adopted by the UEFA Executive Committee at his meeting on 21 March 2011 and come into force on 1 May 2011 (published in www.uefa.com)

 

[10] In order to ascertain whether the subject services related to sport matches are to be considered generic services (for which art. 7-ter of the Italian VAT Code provides the relevant rules for territoriality) or sport services inclusive of additional services (for which the territoriality rules are provided by art. 7-quinquies of the Italian VAT Code) reference must be made to art. 26 of EC Regulation 282/2011, in GUUE L 77/1 dated 23 March 2011, which states: “An operation in which an entity carries out the granting of broadcasting rights of football matches to taxpaying entities, falls within the scope of art. 44 of Directive 2006/112/EC.” Considering that the afore-mentioned art. 44 of the Directive 2006/112/EC is the article of reference for the rules of VAT territoriality for generic services, this means that the territoriality rule applicable to the case at hand is the general one provided by art. 7-ter of the Italian VAT Code. Please note that the EC Regulations are directly enforceable in the Member States without the need to implement the relevant rules by means of domestic law. In this regard, see also the comment of M. Bancalari e F. Coaloa, “Territorialità IVA delle prestazioni generiche”, in: Il Fisco, no. 10, 16 May 2011, p. 3129.

[11] Any commissions paid to the agent by UEFA, assuming that the agent is a non-resident entity from an Italian point of view, will not give rise to any Italian VAT issues.

[12] For more details see also  M. Longobardi, “Profili IVA della cessioni in ambito internazionale dei diritti radiotelevisivi delle partite di calcio”, in: Rivista di Diritto ed Economia dello Sport, Vol. 1, Issue no. 2, 2005, and L. del Federico, “Cessione dei diritti televisivi delle società di calcio in ambito internazionale ed imponibilità ai fini IVA”, in: Il Fisco, no. 35/2003.

 

[13] The application of the reduced withholding tax according to the Tax Convention in force is, in fact, a faculty for the withholding agent that decides in this sense undertaking the related responsibility. For this reason in order to obtain the application of the Convention this certificate is necessary (see Ministerial Circulars no. 86 dated 13 September 1977, no. 115 dated 12 April 1978 and no. 147 dated 25 November 1978, and Ministerial Resolutions no. 95/E dated 10 June 1999 and no. 68 dated 24 May 2000.

[14] Any commissions paid by UEFA to the agent assuming that the agent is not fiscally resident in Italy will not imply any Italian income tax issues.

[15] FIFA is an association registered in the Commercial Register in accordance with art. 60 ff. of the Swiss Civil Code. FIFA is domiciled in Zürich (Switzerland).

 

[16] Regulations of the FIFA 2010 World Cup South Africa, ratified by the FIFA Executive Committee and come into force on February 2010 (published in www.fifa.com)

[17] F.I.G.C. (Federazione Italiana Giuoco Calcio), in www.figc.it.

 

[18] See previous footnote 10.

[19] From the VAT point of view it is fundamental that payments refer to a bilateral contract in which the party receives a payment because it provides a specific service or sells a good or product (see Decision of the European Court of Justice C-277/05 dated 18 July 2007). With a similar approach the Italian Revenue clarified in the Ministerial Resolutions no. 54 dated 24 April 2001 and no. 183 dated 11 June 2002 that a contribution is subject to VAT only if it refers to an obligation to do, not to do or to permit.

[20] According to art. 2 , p. 3 of the Italian VAT Code money’s disposals are out of the scope of VAT.

[21] See previous footnote 10.

[22] See article 9, p. 5, of the Italian Income Tax Code.

[23] The mentioned provision allows tax administration to disregard the tax saving realised by means of transactions (among which the sale of assets is included) which are not supported by valid business reasons.

[24] According to article 9 of the Italian Income Tax Code, the price of any contribution in kind must be valued on the basis of the fair market value of the assets and credits received further to the contribution.

[25] A going concern is deemed all of the assets and liabilities in question being organised in order to carry on a business.

[26] With the term “esterovestizione” we refer to those entities formally having their legal seat abroad but, according to the Italian tax system, deemed to be fiscally resident in Italy. The consequence is the taxation of the related income in Italy. The mentioned presumption admits the proof to the contrary by the taxpayer.

[27] In fact, in order to establish the effective tax residence of the foreign entity, the Italian tax authorities would refer to art. 73 par. 3 of the Italian Income Tax Code according to which an entity is fiscally resident in Italy when for the main part of the fiscal year the legal seat or the place of management of it is located in Italy or the main business purpose of it is carried on in Italy. Please note that according to art. 4 of OECD Model, if an entity is deemed to be resident in more than one contracting state according to the relevant domestic tax laws, it must be considered fiscally resident in the state in which its place of management is situated.

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This entry was posted on 06 Mar 2012 14:05, in Uncategorized.