Taxes in sport

Are you a sponsor of a sports club? Do you cooperate with a sports club in terms of advertising or marketing? Do you receive sponsorship benefits from a sports club?

Do you run a sports club? Do you realise sponsorship benefits for your sponsors? Are you looking for new forms of sponsorship cooperation? Do you use sports facilities, including municipal facilities on preferential terms?

Are you an athlete? Do you cooperate with a sports club, acquire sponsorship partnerships, incur expenses related to your sports career?

Due to the continuous development of the sports industry, the importance of a tax-, legal- and accounting-safe arrangement of cooperation between sports clubs, sponsors and players is growing.

To meet the current challenges, we provide specialist tax, legal and accounting services for the sports industry. We help you understand the current regulations and adapt your actions to them, together with a presentation of the consequences resulting from them.

For whom

sports clubs

Owners of sports clubs

associations

foundations

athletes

local authorities

municipal companies

How we can help

Activities in sport, due to their specificity and at the same time the lack of clear regulations, give rise to significant risks both on the part of the sports clubs and the entities working with them, including sponsors and players.

CIT in sport

Advice for sports clubs

Sports sponsorship

accounting for sponsorship,
identification of sponsorship benefits,
verification of the level of equivalence of sponsorship benefits,
documentation of sponsorship.

Cooperation with athletes

comprehensive assessment of potential benefits and verification of tax risks in respect of cooperation with an athlete based on an employment contract, contract of mandate, personally performed activity or cooperation on a B2B basis,
recommendations including effective settlement of cooperation with an athlete, taking into account union (industry) regulations.

Tax costs in sport

Assessment of the possibility of recognising club expenses as tax deductible,
verification of the club's revenue and expense structure,
signalling tax risks in terms of tax revenue and tax deductible costs.

Internal procedures in sport

Development and implementation of internal procedures for income tax settlement,
introduction of mechanisms to verify the level of equivalence of sponsorship benefits.

Withholding tax and sport

assessment of foreign payments subject to withholding tax,
verification of the sports club's potential obligations as payer of income tax on foreign payments,
support in the field of foreign payments, including due diligence by the payer, research into the status of the beneficial owner of the payments, as well as the possible application of a tax exemption or preferential withholding tax rate for foreign payments.

Tax compliance in sport

Ensuring legality of income tax settlements,
Ongoing support including verification and recommendations for any doubts and problems arising on the part of the club.

Ongoing support with actions of tax authorities

Support in case of actions taken by tax authorities in the field of income tax.

Advice to sponsors

Sponsoring

accounting for sponsorship,
identification of equivalent benefits,
verification of the level of equivalence of sponsorship benefits,
possible sponsorship support,
documentation of sponsorship.

Tax costs

assessment of the sponsor's expenses in the context of their tax deductibility,
verification of the revenue and cost structure of the club,
signalling tax deductible expense risks.

Internal procedures

Development and implementation of an internal procedure for the settlement of income tax,
introduction of mechanisms to verify the level of equivalence of sponsorship payments.

Tax compliance

Ensure lawfulness of income tax settlement, taking into account the correct qualification of sponsorship benefits.
Ongoing support including verification and recommendations for any doubts and problems arising for the sponsor.

Ongoing support in dealing with tax authorities

Comprehensive support in the event of actions taken by the tax authorities in the context of the tax settlement.

VAT in sport

Scope of VAT tax advice for the sports industry:

Qualification of benefits - assessment of whether financial or in-kind support (barter, donation) constitutes a service subject to VAT;
Sponsorship and VAT - verification of the possibility of tax liability on the part of the sponsor and the sponsored;
The right to deduct VAT - assessing the sponsor's ability to deduct VAT on donated goods/services and on purchased services under sponsorship;
Documentation of cooperation - advice on how sponsors/clubs/athletes document their mutual settlements;
Secure sponsorship agreement - support in the preparation of sponsorship and promotional agreements - especially in the context of mutual benefits and tax obligations;
VAT registration obligations - analysis of the obligation of athletes and sports clubs to register for VAT;
VAT exemptions - advice on the feasibility and effectiveness of VAT exemptions dedicated to sports activities.

Property tax in sport

Advice to entities owning sports facilities (e.g. sports clubs, facility management companies)

Qualification of sports facilities for real estate tax (RET) purposes:

determination of the scope of facilities constituting buildings or structures in light of the revised definitions from the beginning of 2025.
verification of the existence of exemptions/exemptions from taxation for the property,
physical inventory of assets.

Property surveys and valuations

Surveying measurements of usable/rentable area;
valuation of assets for, inter alia, determining the RET tax base or for other purposes;

Identification of tax liability

Assessment of who is liable to RET for leased or subleased facilities, including those owned by the local authority,
Determining the possibility of exemptions due to, inter alia, the legal form, object of activity or statute of the entity concerned,

Optimal accounting for capital expenditure on new facilities according to the Cost Segregation procedure:

detailed segregation of fixed assets from investments based on tax and accounting regulations;
determination of initial values of fixed assets taking into account the full pool of capital expenditure (CapEx);
Determination of T&E groups and depreciation rates.

Ongoing support for actions by the tax authorities

Support in case of actions taken by the tax authorities on RET;
Assistance in preparation of explanations and analysis of source materials (construction and accounting documents);

PIT/ZUS in sport

Advice to sports clubs (as entities cooperating with individuals)

Choice of form of cooperation with players, coaches and team:

assessment of benefits and tax and contribution risks: employment contract, contract of mandate, personally performed activity, B2B cooperation,
Recommendations on the optimal form of employment taking into account national and international regulations.

Tax and contribution costs of employment:

calculation of the total gross-net cost of the various forms of cooperation,
simulations of club costs depending on the type of benefits and form of cooperation.

Social and health insurance:

Determination of the applicable legislation in terms of social security provisions,
verification of cross-border cases - players and coaches working in different countries.

Cooperation with foreigners:

procedures for legalising residence and work,
obligations of the payer in Poland,
Tax consequences resulting from international double taxation treaties.

Settlements when hiring out players:

verification of obligations on the grounds of PIT and ZUS,
Issues of so-called "mutual benefits" between clubs (e.g. covering salary costs by the lending club).

Taxation and taxation of additional benefits:

benefits in kind (e.g. housing, cars, sports equipment),
Marketing contracts and image rights - revenue sharing, income classification,
prizes, bonuses, performance bonuses.

Ongoing support in settlements and handling of audits:

preparation for inspections by Social Security and tax authorities,
representation before tax authorities in PIT matters
Implementation of internal procedures for PIT/ZUS reporting.

Advice to individuals - players and members of training teams

Tax residency:

establishing the tax residency status of players/coaches,
Change of tax residency and obligations towards the Polish tax authorities.

Rules of taxation of income from different sources and countries:

income from employment contracts, activities, property rights, leases, sponsorship agreements,
Principles of assigning income to the correct country.

Capital income from different countries:

investments of athletes (shares, funds, cryptocurrencies) - taxation in Poland,
Avoidance of double taxation (dividends, gains on realisation of capital gains).

Tax settlements:

preparation of annual PIT returns in Poland,
settlements abroad and support with cross-border tax obligations,

Other tax areas in sport

Withholding tax : for payments to foreign agents, coaches or athletes.
Prize tax: rules for taxing prizes in kind and cash from competitions and contests.
Taxation of foreign transfers : how to account for income from the sale of an athlete to a foreign club, also in the context of agents' commissions.
Tax reliefs and exemptions for individuals (e.g. youth relief, return relief).
Co-operation with tax experts worldwide to fully support individuals with foreign transfers (change of tax residence, effects on PIT and social and health insurance contributions).

Transfer pricing in sport

Identification of relationships within the meaning of transfer pricing legislation, related parties and transactions that may be subject to transfer pricing documentation and reporting obligations (including consideration of the specifics of local government entities).
Development of a related party settlement model for specific transactions, primarily taking into account their specificities, including, for example:
- transactions resulting from the provision of a sports facility by an operator to a sports club,
- transactions resulting from the conclusion of short- and long-term contracts for the promotion of a brand or a sports club as well as sponsorship contracts,
- transactions related to the transfer or provision of intellectual property rights, including trademarks,
- transactions related to widely understood CSR (Corporate Social Responsibility) activities, including the financing of sports clubs' activities by affiliated entities.
- transactions related to the production and distribution of merchandising.

As part of our support in developing or changing the settlement model, we offer to provide key guidelines and information related to the proper selection of the transfer price calculation method, including support in the proper determination of e.g. elements of the cost base, cost allocation, level of profit mark-up, amount of royalties, etc.

Preparation of comparative analyses for empirical verification of the marketability of remuneration in the transactions performed.
Identification of key transfer pricing risk areas in terms of the previously adopted method of settlements between related parties and, if possible, identification of guidelines to minimise such risks (based on prior analysis of the OECD Transfer Pricing Guidelines, recent case law, positions of tax authorities and current market practice).
Support in fulfilling transfer pricing documentation and reporting obligations (including preparation of transfer pricing documentation and analysis and reporting of transfer pricing information - TPR form).
Development of a transfer pricing policy to ensure consistency and transparency in related party settlements and the ability to plan transactions.

Tax deductions and allowances in sport

Sponsorship relief

Verification of the applicability of the sponsorship allowance by the income tax payer,
Assessment including presentation of potential savings and tax risks when applying the relief,
verification of the expenses incurred in the context of the tax relief applicability,
preparation of a calculation including presentation of tax benefits in the event of application of the relief,
support in obtaining an individual interpretation of the tax law on the possibility of accounting for the sponsorship tax relief,
assistance in the preparation of the annual return covering the use of the sponsoring tax relief.

Deduction of donations for statutory purposes

Assessment of the possibility of deducting donations for sports and statutory purposes,
preparation of a tax calculation including the presentation of tax effects when applying the deduction,

Tax exemption for sports clubs

verification of the applicability of the tax exemption for the sports club,
assessment of potential benefits and conditions,
structuring the activities of the sports club in order to apply the tax exemption for the sports club.

Family foundation in sport

For whom:

owners of sports clubs;
persons involved in the management of sports clubs;
sponsors;
players, coaches, sports staff.

Scope of advice:

Determining the optimal family foundation policy taking into account tax efficiency;
Determination of the appropriate scope of assets to be contributed to the family foundation;
drawing up the statutes of the family foundation in accordance with the assumptions made and the long-term plans;
preparation of the necessary documentation relating to the establishment and equipping of the family foundation with assets;
keeping the accounts of the family foundation,
preparation of the tax accounts
preparation of the financial statements of the family foundation
verification of current issues and tax matters during the operation of the family foundation,
drafting requests for individual interpretations for the family foundation,
requesting a collateral opinion in the event of significant reorganisation activities involving a family foundation.

Why MDDP?

We support the sports club, sponsors, as well as professional athletes practically from both the legal, tax and accounting side. We understand the sports industry and the specifics of each of its participants.