Principles regarding income tax collected from athletes’ salaries have been determined

The procedures and principles regarding the return of income tax paid to the corresponding tax office by withholding the salaries paid to athletes to the special accounts opened by the corresponding employers and the use of the amounts transferred to this account have been regulated.

The Regulation on the Refund of the Income Tax Collected by Withholding the Salary of Athletes, 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 corporations registered by the Ministry of Youth and Sports may benefit from the application of the refund of income tax collected from the athlete’s salary through withholding.

To determine the income tax to be refunded, the income tax amounts deducted from the salaries paid to the athletes and declared on time and paid to the tax office on the due date will be taken into account.

Payments and benefits provided to athletes such as monthly salaries, achievement bonuses, match fees, signing fee, image rights and other names will be assessed within the scope of salaries.

The withholdings on the salaries of the rest of the sports personnel, technical personnel and personnel who work in administrative services, support services and other functions will not be within the scope of the refund request.

OPEN A PRIVATE ACCOUNT

To collect revenue from special accounts, one or more accounts will be opened in state-owned banks established in Turkey by sports clubs and sports joint-stock companies. The amounts of the income tax transferred to the accounts by the tax offices and the income obtained from the compensation of the amounts in this account will constitute the sources of the special accounts.

In order for taxes withheld on wage payments made by sports clubs and sports corporations to be refunded to said sports clubs and sports corporations, these taxes must be timely declared with the summary and premium service return for the corresponding month, and the amounts accrued from income tax (withholding taxes) must be paid on the due date. The income tax levied on returns filed outside the legal term, including those filed with regret, will not be refunded, except for rectification returns filed within the legal term.

Withholdings paid by the employer on salaries paid to athletes will be transferred to the special account opened in the name of the corresponding employer by the tax offices, with proof of correction within 5 business days of payment.

The amounts in the special account cannot be pledged or seized, except for credits in the area of ​​settlements made for misuse.

TO BE USED FOR AMATEUR SPORTS ACTIVITIES

Amounts transferred to the employer’s private account will only be used for gross salaries and payments made to athletes operating amateur sports activities and sports training infrastructures, their coaches and other sports personnel.

This account will also cover the expenses of maintenance, accommodation, travel, health, education and training of the people included in this area, as well as preparation camps, competition, material and equipment, sports federation visa, license, registration and participation expenses related to amateur and infrastructure activities. The account can be used for the expenses incurred for the construction of infrastructure sports training facilities and the operation and maintenance of these facilities, including the salaries of the personnel employed in these facilities.

The activities related to the infrastructure teams of the super league, the first league, the second league and the third league organized by the Turkish Football Federation in the field of football will be evaluated in the field of amateur sports activities.

The sports club and the sports corporations constituted as a subsidiary or affiliate of this sports club may be transferred among themselves to be spent for the same purpose, of the amounts returned to the sports clubs and sports corporations and taken into account especially and not spent.

The withholdings that are deducted from the salaries paid to the athletes in the month of April and that are declared with the concise statement and service bonus to be presented in May and that are paid when due, will be transferred to the account or special accounts notified by the taxpayers, being returned within 5 business days following the date of collection.

While the previously published regulation on the matter is repealed, income tax withholding on salary payments made to athletes between January 1, 2023 and March 31, 2023 will be made in accordance with the provisions of the repealed regulation.

Among the public limited companies dedicated to sports activities, those whose registration process continues with the Ministry of Youth and Sports will also benefit from the refund request.

The regulation entered into force on April 1. (AA)