Sponsorship expenses in favor of amateur sports associations and amateur sports clubs are fully deductible by the sponsor.
This was stated by the Court of Cassation with order no. 3470/2024 published on 7 February 2024. In our system there is an absolute legal presumption regarding the advertising nature of sponsorship expenses incurred for the benefit of ASD and SSD. Consequently, these fees are fully deductible for the provider.
Compared to the general rules on the deductibility of costs provided for by the Consolidated Law on Income Taxes, art. 90, paragraph 8, of law 289/2002 constitutes a special rule. This is because it is a provision that dictates specific conditions for the deductibility of advertising expenses, in response to the specific needs of the reference sector, i.e. amateur sports teams.
The Supreme Court of Cassation overturned two levels of judgement, starting from an assessment by the Revenue Agency which had as its object the recovery, for IRES, IRAP and VAT purposes, of part of the costs incurred for advertising expenses by an LLC, in relation to amounts paid to two Asd.
These costs were considered only partially inherent and deductible to the extent of 20% of the achievable profit. The Srl had lodged an appeal and it had been rejected at both first and second instance.
But these sentences were overturned by the judgment of the Court of Cassation which highlighted that the payments in money or in kind paid to Asd, Ssd, foundations established by scholastic institutions, scholastic sports associations that carry out activities in the youth sectors recognized by the Sports Federations or by sports promotion bodies, which do not exceed a total annual amount of 200,000 euros, constitute fully deductible advertising expenses for the provider.
This is a favorable tax regime for individuals who invest in amateur sports.