Tax implications for Olympic medalists: how much tax do they pay on their winnings?

What Taxes Do Olympic Medalists Pay?

The Italian National Olympic Committee (CONI) has confirmed the prize money for the 2024 Olympics, following the model of Tokyo 2020: €180,000 for each gold medal, €90,000 for silver, and €60,000 for bronze.

CONI and Olympic Prizes

CONI is the Italian National Olympic Committee, responsible for organizing and enhancing the national sports scene.
It operates under legislative decree 242/1992 and subsequent amendments.
The Department for Sport oversees CONI, which includes 48 sports federations and provides financial rewards to Olympic medalists.

Taxation of Olympic Prizes

Prize money awarded by CONI is subject to taxation in the athletes’ country of residence.
It’s worth noting that not all athletes reside in Italy.
Athletes who win multiple medals, such as swimmers competing in various events, accumulate prizes.
For example, Federica Pellegrini, Thomas Ceccon, and Alice d’Amato have excelled in different disciplines at the ongoing Olympics.

While Italian prizes may seem substantial, Hong Kong offers the highest reward globally, with $768,000 for a gold medal.
However, some countries like the United States provide lower incentives.
In Italy, these prizes are taxed favorably.

Italian Taxation Rules

Italian law imposes a 20% withholding tax on sports prizes and earnings under sporting events.
The law ensures a fair tax structure for athletes and coaches associated with amateur sports activities.

CONI serves as a tax substitute by applying the necessary deductions upfront, simplifying tax procedures for athletes.
The law exempts prizes up to €300 for athletes in the Amateur Sports Activity Registry until December 31, 2024.

The Sinner Case

Despite beneficial tax laws, many Italian athletes, like tennis player Sinner, choose foreign residences, leading to non-payment of Italian taxes.
Sinner, based in Monte Carlo, justifies his decision by emphasizing superior training facilities, favorable climate, and personal ties to the location.

It’s essential to understand the tax implications and choices made by Olympic athletes regarding their prizes and residency, reflecting the global nature of sports and taxation.