The transfer of a footballer from one sports club to another represents, from a fiscal point of view, an operation comparable to the sale of an intangible asset, capable of generating a capital gain and, therefore, subject to IRAP.
This is what is established by the Regional Tax Commission of Piedmont which, in a recent ruling, rejected the appeal filed by a football club concerning the request for reimbursement of sums paid by IRAP, following the realization of some capital gains deriving from from the sale of three players (Judgment n.825 / 5/2017 filed in the secretariat on 22/05/2017, freely visible on www.studiolegalesances.it – Documents section, Doc.1).
According to the Piedmontese judges, in fact, “… the operations examined here must be considered included in the provisions of art. 1406 c.c. (which also provides for the variability of the contract sold) for the sale of the contract with the consequent effect on the applicability of IRAP “.
In the case in question, a sports company had “sold”, between 2008 and 2010, three of its players to other professional teams, realizing capital gains and paying the IRAP to the Tax Office.
Following this, the transferor Club, having taken note of some jurisprudential rulings that sanctioned the non-taxability, for IRAP purposes, of the proceeds deriving from the transfer of players from one sports club to the other, presented, to the Revenue Agency, a formal request for reimbursement of the tax previously paid.
This request was rejected by the Financial Administration, which, referring to Resolution No. 211/2001 (Doc.2), pointed out that the capital gains deriving from the sale of an athlete were subject to IRAP as equivalent to the sale of capital goods.
The taxpayer challenged the denial of reimbursement before the Provincial Tax Commission of Turin, claiming that the sales in question could not be classified as a transfer of intangible assets. Specifically, the Club underlined how, in the case of sale of a player, the object of the sale was not represented by the contract between the professional and the transferring company, but by the right to terminate the previous relationship that linked the player to the company of origin .
In support of this, the applicant pointed out that, following the entry into force of Law n.91 / 1981, any limitation to the contractual freedom of athletes had been eliminated, with the consequence that they must be assimilated to employees and could resolve the contracts with the respective teams in advance.
For this reason, therefore, the sports club pointed out that it was not correct to frame the sale of a footballer under the institute of “transfer of the contract” governed by Article 1406 Civil Code, since it was more similar to the institute of novation .
This is because the regulation of the “transfer of the contract” expressly provides that the content of the “transferred” contract remains unchanged, while the transfer of a player from one team to another involves ALWAYS the modification of two essential elements of the legal transaction, ie consideration and duration.
Therefore, according to the taxpayer, the amounts collected by the latter as a result of these transfers did not represent the fees paid by the purchasing Club to obtain the right to contract with the players, with the consequence that these transactions could not be equated with a sale of an intangible asset and, therefore, were not taxable for IRAP purposes.
In support of its reasons, the sporting club recalled the principle of law sanctioned, in a similar case, by the Regional Tax Commission of Lazio with the sentence n.92 / 28/2012 (Doc.3), according to which “following the Law n.586 / 1996, which implemented the Bosman ruling, eliminating the obligation for a new company to pay to the company owner of the previous contract a sum as compensation for training and promotion of the professional athlete, the players must consider themselves to all the effects of employees. It follows that there is no longer an autonomous and economically assessable right distinct from the employment relationship and that the player’s sports performances are used exclusively on the basis of the contract of engagement. … This Panel considers that, in the case under consideration, one could not disregard the assessment of the synallagma that links a sports club to its players, which can not be traced back to the institute for the transfer of the contract, as governed by art. 1406 of the Civil Code, lacking the essential elements of the assignment (Duration and Content).
The right arising from the purchaser is therefore the right to contract with the player; the consequence appears evident, when yes the autonomous identifiability of the right to contract, as an improper good that becomes part of the assets of the football club and of which a specific highlight is mandatory in the balance sheet, is mandatory. Nonetheless, the capital gain obtained from the assignment of the credit right can not be considered as coming from capital goods, since the means to allow the company’s activity (player’s performance) arises from a different legal transaction, following the sale. it follows that, acquiring the assignee company only the right to conclude a new contract with the player, and not constituting this any independent productive function, the agreement between the two companies without the subsequent agreement with the player does not allow to state the realization of a gains on the transferor, not deriving from the sale of an instrumental asset, with consequent subjection to IRAP. “In the light of these reasons, therefore, the appellant concluded that the Administration was ordered to reimburse the sums previously paid to IRAP title, burdened by the interests. As a result of this, the Agenzia delle Entr was constituted in court ate, which reaffirmed the legitimacy of its actions and requested the rejection of the appeal. Specifically, the Office claimed that the “sales” in question had to be traced under the institution of “transfer of the contract”, as the object of the transfer it was the right to exclusive use of an athlete’s services against payment of a fee. Therefore, according to the Financial Administration, with the transfer of the contract, the assignee sports company purchased, with the consent of the transferred athlete, the right that was the object of the contract and succeeded in all obligations and related rights. , the right to exclusive exploitation of athletic performance of an athlete should be considered as an intangible asset instrumental to the operation of the company, both in terms of tax, as amortizable, and on the civil law, as necessary for the achievement of the It therefore derives from this that “the compensation deriving from the transfer of the athlete is capable of generating capital gains or losses classifiable among the ordinary components of income, with the consequence that the transfer of a player is unequivocally an act which falls within the management of the football team and, therefore, represents an event linked to the ord of the football company able to generate taxable income for IRAP purposes “. On this point, moreover, the Tax Authorities pointed out that the same article 5 of Law n.91 / 1981 explicitly referred to” transfer of the contract “. of its own reasons, the Tax Administration referred to the Opinion of the Council of State No. 5285 of 28.12.2012 (Doc.4), with which, with regard to the taxation for IRAP purposes of the proceeds realized on the transfer of the performance contracts players’ sports, it was underlined that “… the possible different regulation of the relationship between the new company and the athlete in terms of duration, consideration and other accessory elements, is not alone sufficient to influence the legal classification of the case, precluding the traceable to the scheme of the assignment of the contract. Moreover, if the contractual autonomy allows for the splitting of a substantially unitary economic transaction, such as that consisting in the transfer from one company to another of an athlete’s contract, it is in any case necessary that the splitting be functional to the satisfaction of interests. worthy of protection; this is not the case in the present case, since there is no meritorious interest justifying the decomposition of the transfer case, which certainly can not be considered as the tax savings “. Finally, the Office pointed out that, even in the case of to whom such income should be considered as extraordinary components of income, the same would be equally taxable for IRAP purposes pursuant to Article 4 and 5 of Legislative Decree no. 446/97, as related to the amortized cost, deductible for IRAP purposes, at the time supported by the team to acquire the right to athletic performance of the athlete. The Provincial Tax Commission of Turin sez. III, after having instructed the case, pronounced the sentence n.1346 / 3114 (filed on 23/06/2014, Doc.5) with which he rejected the appeal filed by the taxpayer. Specifically, the first instance judges said that reconstruction by the sporting company was not in line with what was assumed by the Supreme Court of Cassation in sentence n.3545 of 4.11.2003 (Doc.6), “when having to face the specific profile of the qualification to be recognized to the contract of sale of a sportsman from one company to another, he referred to Article 5 of Law n.91 / 81 concerning “the transfer of the sports performance contract”, where it is stipulated that “the assignment of the contract is permitted, before the deadline, from one sports club to another, provided that it allows the other party and the methods set by national sports federations are observed “. The Court has therefore emphasized that it is unequivocally concerned with the transfer of the subordinate employment contract of sports performance (as defined by the aforementioned Article 4) between companies, with the consent of the athlete, with the observance of the federal regulations. … It is no coincidence that the Council of State, called in December 2012 to express an opinion on the tax regime to be applied in such hypotheses … has started from Article 5 of Law n.91 / 81, to reach the interpretative option according to to which the contract with which the right to exclusive use of the athlete’s performance is paid, must be traced to the typical scheme of the assignment of the contract, the scheme under which the assignee acquires with the consent of the assigned athlete right of the contract and occurs in all related rights and obligations. This does not mean that the assignee, on the basis of agreements with the athlete … can continue the contractual relationship with the same contents, or regulate it in a new way, without altering the accessory elements of the contract (in terms of duration and consideration) legal qualification of the case, to the point of jeopardizing it. From this, according to the Council of State, it must be inferred that the realization of capital gains on the transfer of the sports services contract is to be taken into consideration when determining the IRAP tax base, cine had rightly opined the company at an early stage … “In the grounds of the sentence, the first-instance judges also stated that” even if one wanted to consider the proceeds of the anticipated sale as extraordinary components of income, they would still be taxable for the purposes of the tax on the basis of the correlation principle. , sanctioned by the art.5 and 4 D.lgs. n.446 / 97, given that these behaviors can be correlated with the amortized cost, deductible for IRAP purposes previously sustained by the football club to acquire the athlete’s right to athletic services “. Following this, the taxpayer proposed a formal appeal before the Regional Tax Commission of Piedmont, pointing out how the judges of first instance had misinterpreted the principle of right expressed by the Court of Cassation with the sentence n.3545 / 2003. For this reason, therefore, the sports club reiterated that the transfers of the players put in place were extraordinary, autonomous and distinct transactions, not comparable to the sale of capital goods. In the course of the proceedings, the Revenue Agency was established, which reiterated the considerations set out in the previous grade.The Regional Tax Commission, after having instructed the case, pronounced the sentence n.825 / 5/2017, with which rejected the appeal proposed by the sports club, also condemning the payment of court fees, paid in euro 9,000.00. In particular, according to the judges of the second degree “the careful analysis of the documents governing the transfer of a player highlights the presence of three phases: formal agreement between the two companies with indication of the agreed price and the name of the player; the variation of membership that is based solely on the production of the previous agreement in which the athlete expresses his consent; a third formal step in which the buyer takes over from the seller with the same conditions as the original contract. Nothing affects the foreseeable variation of the original contract to allow the assignee to guarantee a more extensive relationship with the player. It is evident from the indicated steps that the assignment of a right is not in question, but the effective transmission of a contract at the time packaged that the acquiring club can, later on, integrate with new clauses. In fact, the initial sale (of the contract) represents the actual foundation for the subsequent steps and can not be considered … other than an actual sale of an intangible asset aimed at producing effects on the parties involved and in particular on the transferor who, renouncing the existing law prematurely , benefits entrepreneurial purposes similar to the sale of capital goods. A different interpretation of the facts would lead … to a situation that can be defined as an elusive norm in violation of the principle of legality in tax matters. In conclusion, the transactions examined here must be considered included in the provisions of Article 1406 of the Civil Code (which also provides for also the variability of the contract sold) for the sale of a contract with the consequent effect on the applicability of IRAP “.In the light of the above, therefore, from the reading of sentence no. 825/5/2017 issued by the Regional Tax Commission of Piedmont, the following conclusions can be drawn. In the case of “transfer” of one player from one sports club to another, the object of the transfer is represented by the right to exploit the athlete’s athletic performance. This right must be considered as an intangible asset instrumental to the operation of the company (necessary for the achievement of the corporate purpose), likely to generate a capital gain and, therefore, subject to IRAP.Finally, it should be noted how, notwithstanding the principle of law established by the aforementioned sentence, the argument concerning the taxation, for IRAP purposes, of the proceeds realized on the occasion of the “sale” of a player is strongly debated in jurisprudence, therefore, the Centro Studi Giuridici Sances, at the aim of offering a constant update to the Sports Associations, to those in charge of the work or, more simply, to anyone interested in furthering the matter, will monitor the situation while awaiting further judgments from the Judges.
Avv. Hiroshi Pisanello
Avv. Matteo Sances
N.B. All the documents mentioned in the comment are freely visible on www.studiolegalesances.it – Documents section.