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Among the systems that companies use to lighten the burden tax burden that they are forced to endure every year, there is definitely that of sports sponsorships. In fact, it is typical to find logos and advertisements of all kinds on athletes and teams: jewelers, restaurateurs, construction companies, shops and other public establishments.

Many companies therefore decide to set up advertising campaigns more or less expensive to obtain economic income and, at the same time, create costs to lower one's profit and therefore pay less taxes.

Sponsorship expenses appear to be fully deductible and equated, by our legal system, to those of dealer if the sponsorship respects some fundamental rules.

  • Advertising costs: they are fully deductible in the year in which they were incurred, or in constant installments in the same year and in the following four years.
  • Entertainment expenses: whose deductibility occurs in the period of support, if they meet the inherence and congruity requirements established by the Ministerial Decree of 19 November 2008 and, therefore, in a lump sum based on the volume of the company's revenues, that is:
  • 1,3% for revenues up to 10.000.000 euros;
  • 0,5% for revenues from 10.000.000 up to 50.000.000 euros;
  • 0% for revenues over 1 euros.

Always for the sponsor, for the purposes IVA, if the sponsorship amount falls under advertising expenses the tax becomes deductible, while it would be non-deductible, and therefore a real cost, if the sponsorship were included among entertainment expenses.

In fact, to enjoy all the tax benefits of sports sponsorship, it is necessary to respect some key principles so as not to allow any tax commission to question the validity of these operations, thus avoiding that the related costs can be included among entertainment expenses.

Set up sponsorship as an ad spend:

    • Tangible presence of a service: the sponsor, i.e. the company that pays the fee to the sponsored party, must receive something in return with the aim of seeing a commercial return from this operation.
    • The sponsored sports club will therefore have to somehow advertise the sponsor's products or services by offering the latter a sales channel that can potentially bring him results. 
    • In sponsorship contract must be very clear obligations of the sponsored sports club against the fee paid by the sponsor and these commitments made must be respected. 
    • Sponsorship expenses incurred by a company during the year must be balanced with respect to its turnover.
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