Deduction of 200,000 Euros of Advertising Without Inherence: Tax Opportunity for Businesses

Sponsorships to amateur sports associations (ASDs) offer a significant tax advantage for businesses: up to 200,000 euros per year can be fully deducted as advertising expenses, without the need to prove inherence or appropriateness of the amount. An opportunity that, if well managed, can translate into concrete tax savings.

How Does Automatic Deductibility Work?

Article 12 paragraph 3 of Legislative Decree 36/2021 stipulates that fees paid to ASDs, school foundations and youth sports groups are considered, up to the limit of 200,000 euros, deductible advertising expenses without further verification of inherence.

This rule incorporates Article 90, paragraph 8, of Law 289/2002, confirming that:

• Up to 200,000 euros, the expense is always deductible, regardless of the direct economic return.
• There is no need to prove the appropriateness of the amount or the link with the company’s activity.
• The deduction occurs in the year in which the expense is incurred (Art. 108 TUIR).

Confirmation also comes from the Supreme Court (Judgments Nos. 26368/2023, 21452/2021 and 8540/2020), which reiterated how, if the regulatory requirements are met, sponsorship expenditure is automatically classified as deductible advertising.

Attention to Documentation

To avoid disputes by the Internal Revenue Service, it is necessary that:

• The fees are intended to promote the brand or products of the sponsoring company.
• There is a concrete activity of the ASD against the payment.
• All documentation (contracts, invoices, receipts) is regular and compliant.

In the case of irregularities, the Internal Revenue Service can disallow the deduction, as happened in Cass. 26368/2023, where a company was not able to benefit from the deduction due to documentary flaws.

The 200,000 euro limit: How is it calculated?

One of the main doubts concerns the reference period for calculating the threshold:

• The limit refers to the tax period and not the calendar year.
• Even with fiscal years that do not coincide with the calendar year (e.g., July 1-June 30), the €200,000 limit remains unchanged.
• If the tax period lasts less than 12 months, the cap is not reduced proportionally.

If 200,000 euros is exceeded?

The excess is treated according to the general rules of business income:

• The first 200,000 euros is always deductible as advertising.
• The excess is deductible only if demonstrable as advertising, otherwise it falls under entertainment expenses, with stricter limits (Art. 108 paragraph 2 TUIR).

Conclusions: An Opportunity to Exploit with Caution

Sponsorships to ASDs offer an immediate and certain tax benefit, but it is crucial:

• Structure documentation properly to avoid disputes.
• Monitor the 200,000 euro cap to optimize tax strategy.
• Evaluate the correct framing of the expenditure if the limit is exceeded.

If you need advice to make the most of this opportunity, Taxdry is by your side with solutions tailored to your business.