ITALY Trends and Developments Contributed by: Maurizio Marullo, Giorgio Vagnoni and Francesco Amoresano, LAWP Studio legale e tributario
LAWP – Studio legale e tributario Corso Monforte 16 Milan Italy
Tel: +39 02 86 99 55 64 Email: marullo@lawp.it Web: www.lawp.it
Capital Gains Reform in Italian Professional Sport The reform for players’ swaps The 2026 Italian Budget Law (No 199 of 30 December 2025) introduced a structural amendment to Article 86, paragraph 4 of the Consolidated Income Tax Act, sig - nificantly reshaping the tax treatment of capital gains realised by professional sports clubs. The reform is expressly aimed at limiting so-called “artificial capital gains”, particularly in football, where there is more risk of accounting practices for player exchanges based on inflated valuations and without real cash flows. Until the 2025 fiscal year, clubs were allowed to spread (or defer) the taxation of capital gains over a period of up to five years, provided that the player’s registration rights had been held for at least two years. This rule applied regardless of whether the transaction gener - ated actual liquidity. Starting from 1 January 2026, this mechanism has been substantially revised: the possibility of tax defer - ral is now limited exclusively to the portion of the capital gain corresponding to the actual cash consid - eration received. Any capital gain arising from player swaps or other non-cash components is subject to full and immediate taxation in the year in which it is realised. In practical terms, if two clubs exchange players by assigning high accounting values but without trans - ferring money, the resulting gain must be fully taxed immediately, even though no liquidity has been gen - erated. In the case of mixed transactions (swap plus cash adjustment), only the cash portion may be spread over time; the remaining part must be taxed upfront.
Where an effective cash payment is received, deferral remains available under strict conditions: • the club must have held the player’s registration rights for at least two years; and • the gain may be spread in equal instalments over a maximum of five fiscal periods (the year of realisa - tion plus four subsequent years). Financial impact and sustainability rules The reform has immediate and significant cash flow implications. In fact, the elimination of deferral for non- cash gains means that clubs engaging in account - ing-driven swaps must now immediately finance the related tax burden. This effectively puts an end to so- called “balance sheet rescue” transactions based on reciprocal overvaluation. Moreover, the 2026 reform marks a clear shift in the fiscal treatment of player trading. By linking tax deferral strictly to actual cash consideration, an eco - nomic incentive behind artificial capital gains gener - ated through swap transactions was removed. The combined effect of immediate taxation and stricter advance payment rules significantly affects financial planning for professional clubs. More broadly, the reform forms part of a coherent regulatory strategy in which tax law and sports governance converge to promote financial transparency, real liquidity and long- term sustainability within the football industry. This is in line with the current UEFA Financial Sus - tainability Regulations seeking to prevent the artificial inflation of revenues through accounting gains. The Italian tax reform reinforces the same policy objective: clubs must increasingly rely on genuine and recurring revenues rather than accounting practices.
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