Managing athletes image rights in Italy: Key considerations for structuring and accounting under the new tax regime

Sportspersons can derive a considerable portion of their income from ancillary activities connected to the sporting performance. Consequently, tax treatment of income deriving from the exploitation of image rights should be placed as a top priority in the tax planning of international sportspersons. This should be front of mind given the increasing number of court rulings on this issue as tax authorities begin to investigate dozens of athletes over image rights irregularities.

Images rights are defined as the “Image rights’, ‘personality rights’, or ‘publicity rights’ all refer to an individual’s proprietary right in their personality and the right to prevent unauthorised use of their name or image or a style associated with them. Athletes will either profit from selling their own image rights or will licence their rights for use by a club for an annual payment, as if they were to agree an advertising contract with the club.”1.

In tax treaty law, The Organisation for Economic Co-operation and Development (“OECD”) Model Tax Convention2 (“OECD Model”) is a “model” developed by the OECD countries (35 countries including the UK, France, Germany, Italy, Spain, Switzerland3), which serves as “guideline” for the negotiation and implementation of double tax treaties between contracting states; Italy and UK signed a double tax treaty following the OECD Model Convention. Thus, the Commentary to the OECD Model Convention is provided as an aid to interpretation.