The draft finance law for 2023 modifies the preferential tax regime for major sporting events

The prospect of hosting international sporting competitions has become the object of fierce competition between States.

To enhance its attractiveness, France has had an attractive tax regime since 2014, that exempts organisations that organise international sports competitions and their subsidiaries from, in particular, (i) taxes and withheld taxes that may apply to French-source profits and income paid or received directly in connection with these events, and (ii) payroll tax and other contributions due in connection with the remuneration of their employees directly involved in the organisation of these events.

The 2023 draft finance law proposes, on the one hand, to continue this system, which was initially intended to be of limited duration, and to extend the benefit of the exemptions it provides to the sub-subsidiaries of the organising bodies, provided that they are involved in the organisation of the competitions.

It also proposes to restrict the scope of the exemption from withheld tax, so that it is only available to remuneration for services, royalties and distributions received by the organisers of the competition. Third party companies, such as the commercial partners of those organisers would therefore be excluded from claiming this exemption.

The draft law also provides for a mechanism to prevent double taxation for individuals participating in the Paris 2024 Olympic and Paralympic Games or carrying out an activity directly related to the organisation of those events, if the State in which they are domiciled for tax purposes has not signed a bilateral tax treaty with France. These individuals would benefit from an income tax rebate for the remuneration received and the income generated in the context of their participation in sports, or for their activities directly related to the organisation of the Paris 2024 Olympic and Paralympic Games.