The Regulation on the Refund of Income Tax Collected by Withholding from Athletes’ Wages, prepared by the Ministry of Treasury and Finance and the Ministry of Youth and Sports, was published in the Official Gazette.
According to the regulation, sports clubs and sports joint-stock companies registered by the Ministry of Youth and Sports will be able to benefit from the application of the refund of income tax collected from the athlete’s wages through withholding.
In determining the income tax to be refunded, the income tax amounts deducted from the wages paid to the athletes and declared on time and paid to the tax office on due date will be taken into account.
Payments and benefits provided to the athletes, such as monthly wages, achievement bonuses, per-match fees, signature fee, image rights and other names, will be evaluated within the scope of wages.
Taxes withheld from the wages of other sports personnel, coaching personnel and personnel working in administrative services, support services and other duties will not be within the scope of the refund application.
Opening a private account
In order to collect special account revenues, one or more accounts will be opened in state-owned banks established in Turkey by sports clubs and sports joint stock companies. The income tax amounts transferred to the accounts by the tax offices and the revenues obtained from the remuneration of the amounts in this account will constitute the sources of the special accounts.
In order for the taxes withheld on wage payments made by sports clubs and sports joint-stock companies to be refunded to the said sports clubs and sports joint-stock companies, these taxes must be declared in due time with the concise and premium service declaration for the relevant month, and the accrued income (withholding tax) tax amounts must be paid on due date. The income tax levied on the declarations submitted after the legal deadline, including the declarations submitted with regret, will not be refunded, except for the correction declarations submitted within the legal period.
The withholding amounts paid by the employer over the wages paid to the athletes will be transferred to the special account opened in the name of the relevant employer by the tax offices, with a correction slip within 5 working days following the payment.
The amounts in the special account cannot be pledged or seized, except for the receivables within the scope of assessments made for misuse.
To be used for amateur sports activities and infrastructure
The amounts transferred to the employer’s private account will only be used for the wages and gross payments made to the athletes operating in amateur sports activities and infrastructure sports training facilities, their coaches and other sports personnel.
This account will also cover the subsistence, accommodation, travel, health, education and training expenses of the individuals within this scope, as well as the preparation camps, competition, materials and equipment, sports federation visa, license, registration and participation expenses related to amateur and infrastructure activities. The account can be used for the expenditures made for the construction of infrastructure sports training facilities and the operation and maintenance of these facilities, including the wages of the personnel employed in these facilities.
Activities regarding the infrastructure teams of the super league, first league, second league and third league organized by the Turkish Football Federation in the field of football will be evaluated within the scope of amateur sports activities.
The sports club and the sports joint stock companies established as a subsidiary or affiliate of this sports club will be able to transfer between themselves to be spent for the same purpose, from the amounts returned to sports clubs and sports joint stock companies and taken into special account and not spent.
The withholding amounts, which are deducted from the wages paid to the athletes in April and declared with the concise and premium service declaration to be submitted in May and paid on due date, will be transferred to the special account or accounts notified by the taxpayers, by being refunded within 5 working days following the date of collection.
While the previously published regulation on the subject is repealed, the income tax withheld on the wage payments made to the athletes between January 1, 2023 and March 31, 2023 will be made in accordance with the provisions of the abolished regulation.
Among the joint stock companies engaged in sports activities, those whose registration process continues with the Ministry of Youth and Sports will also benefit from the refund application.
The regulation entered into force with effect from 1 April.