Tax exceptions are a condition imposed by the International Olympic Committee on the host city of the Olympic Games. THOMAS PADILLA / AP
“There will be no Olympic tax”, assured the President of the Republic, Emmanuel Macron. In any case, there will be no taxes for the Olympics. The hosting of the Olympic Games (OG) in France in the summer of 2024 is synonymous with tax exemption measures for the organizers of the event – and for the structures and people close to the organization.
However, it is difficult to know exactly the impact on public coffers of these exemptions, which are a condition imposed by the International Olympic Committee (IOC), but which, more broadly, also apply, since 2014, to major international sporting events. (GESI) organized in France.
No figures specific to the Olympics appear in the finance bill for 2024, the year of the Games, which deputies begin examining on Tuesday October 10 in the finance committee. The Ministry of Sports and the Olympic and Paralympic Games says it does not have an overall figure for the Olympics effect due to these tax expenditures, as they are called. Also questioned, the budget ministry did not respond.
According to government budget experts, the impact of these tax rebates would nevertheless be limited compared to the revenue that the Games will generate. They add that this provision, which dates from 2014, in favor of the organizers of major international sporting events, was also created because hosting the latter generates more revenue than loss of revenue for the State.
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Exemptions on royalties paid to the IOC
The documents associated with the finance bill for 2024 provide overall figures on the tax expenditures of the “sport mission”, in particular those which concern “ organizations and their subsidiaries responsible for organization in France » sporting events such as the GESI, among which the Olympic Games are included.
The shortfall for the State budget due to the exemptions from profits and income made in France by these GESIs is estimated at 14 million euros for 2023 and 2024, compared to 4 million in 2022, when that linked to exemptions from withholding taxes on their profits and income is estimated at 1 million euros, as in 2023 and 2022. In both cases, no details are given as to the part which concerns the Olympic sphere. No more than the one which returns to the Rugby World Cup, in progress.
In the same way, neither the Rugby World Cup nor the Games are isolated from the 56 million euros in 2023 and 60 million euros in 2024 (compared to 60 million in 2022) in tax losses due to the reduced VAT rate. 5.5% applied to ticketing for sporting events.
One thing is certain: the Organizing Committee for the Olympic and Paralympic Games (Cojop) is not affected by exemptions from corporate tax and taxes linked to remuneration paid to its employees. Indeed, the structure, which provides 4.38 billion euros in revenue, is not expected to generate profits and, not subject to commercial taxes, is not liable for payroll tax.
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For the State, the shortfall in tax revenue linked to the Olympic Games would essentially come from the exemption from withholding tax for the royalties paid to the IOC by the Cojop on its partnership income and the non-taxation of the official timekeeper of the Games, the Swiss watchmaker Omega, on the remuneration received from Cojop. This was recalled in a report (known as “budgetary yellow”) relating to the public financial effort in the field of sport, published in October 2022, which quantified these losses of tax revenue at respectively 3.25 million euros and around 4 million euros.
82 million euros in tax expenditure for the sports mission
In the finance bill for 2024, the amount of tax revenue losses appearing with regard to the sports mission is estimated at 82 million euros, compared to 78 million expected in 2023 and 72 million in 2022. The main source of the shortfall to be won is the reduced VAT rate of 5.5% applied to ticketing for sporting events. In addition to the exemptions on profits and income and on withholding taxes applied to the organizers of major international sporting events, 7 million euros will evaporate in 2024 (as in 2023 and 2022) due to the exemption of sums perceived by referees and judges. The cost of spreading over four years the imposition of the amount of bonuses paid by the State to medalists at the Olympic and Paralympic Games and their guides has not been quantified for 2024.
Local communities also affected
However, the tax exception regime from which the organizers of the Olympic Games benefit does not only affect the State budget, but also local authorities. In their case, the main source of loss is the contribution on the added value of companies, as noted in the “budgetary yellow” at the end of 2022.
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If this document did not quantify this loss, it ensured that it “will be much lower than the additional tax revenue generated by the event”. A statement also made regarding all the exemptions from which the Olympic Games will benefit, the additional tax revenues due to the Games being estimated between 400 and 600 million euros.
For comparison – even if the size of the two events is not comparable – the hosting of Euro football in 2016 resulted in a loss of tax revenue of 65.1 million euros, according to government figures.
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