2006/898/EC: Commission Decision of 22 June 2005 on the measure implemented by Italy for professional sports clubs (Decreto Salva Calcio) (notified under document number C(2005) 1794)   (Text with EEA relevance)
Date: 2005-06-22
Institutions: European Commission
Subjects: Italy, State aid, control of State aid, professional sport, sports body, tax system

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Official Journal of the European Union

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COMMISSION DECISION

of 22 June 2005

on the measure implemented by Italy for professional sports clubs (Decreto Salva Calcio)

(notified under document number C(2005) 1794)

(Only the Italian version is authentic)

(Text with EEA relevance)

(2006/898/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(4)

Having regard to the Treaty establishing the European Commu-
nity, and in particular the first subparagraph of Article 88(2)
thereof,

The Commission received comments from the Italian
authorities by letter of 13 February 2004 and from
interested parties by letters of 19 January 2004 and
16 February 2004. By letter D/51415 of 25 February 2004,
the Commission forwarded the comments of interested
parties to Italy, which was given the opportunity to react.

Having called on interested parties to submit their comments
pursuant to the provision cited above (1) and having regard to
their comments,

(5)

Whereas:

By letter No 08/RB/04 of 10 March 2004, the Italian
authorities undertook to amend the measure in question
with a view to removing any tax effects it might have. In
view of the undertaking to render the measure compatible
with the Community rules on competition and since the
measure had no immediate effect from the point of view of
state aid, the Commission suspended the procedure until
such time as the measure had been amended.

(1)

(2)

(3)

I.

PROCEDURE

The Commission learned through the press that, when
Decree-Law No 282 of 24 December 2002 was being
converted into statute, the Italian Government adopted a
measure on accounting rules for professional sports clubs.
By letter D/51643 of 12 March 2003, the Commission
requested information on the measure in question. By letter
No 5243 of 22 April 2003, the Italian authorities requested
an extension of the deadline for submitting the information
to 14 May. Not having received any reply by the date set,
the Commission requested the information by letter of
22 May, in which it reminded the Italian authorities that,
according to Article 88(3) of the EC Treaty, the aid measure
may not be put into effect until the Commission has
presented its comments on the matter. The reply of the
Italian authorities was received on 26 June 2003.

(6)

By letter No 13346 of 11 November 2004, the Italian
authorities submitted to the Commission the text of the
amendments to the Legge Comunitaria 2004, which was
being examined by the Italian Parliament. The pre-
announced amendments were finally introduced by way
of Article 28 of Law No 62 of 18 April 2005 (Disposizioni
per
obblighi derivanti dall'appartenenza
dell'Italia alle Comunita' europee. Legge comunitaria 2004 (3) ).

l'adempimento di

II.

DESCRIPTION OF THE MEASURE

By letter of 11 November 2003, the Commission informed
Italy that it had decided to initiate the procedure laid down
in Article 88(2) of the EC Treaty in respect of the measure.

(7)

The Commission decision to initiate the procedure was
published in the Official Journal of the European Union. (2)
The Commission invited interested parties to submit their
comments on the measure.

introduced by virtue of Article 3(1bis) of
The measure,
Decree-Law No 282 of 24 December 2002, which lays
down urgent measures regarding compliance with Com-
munity and tax law, collection and accounting procedures
and was converted into Law No 27 of 21 February 2003
(‘Law No 27/2003’),
is applicable to the sports clubs
governed by Law No 91 of 23 March 1981 (‘Law No 91/
1981’).

(1) OJ C 308, 18.12.2003, p. 9.
(2) See footnote 1.

(3) Published in Official Gazette No 96 of 27 April 2005 (Supplemento

ordinario n. 76).

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(8)

The measure, set out in Article 18bis(i) of Law No 91/1981,
as amended by Law No 27/2003, allows sports clubs to
enter in a special balance-sheet item in the first annual
accounts following the entry into force of the Law the
capital losses arising from the decreased value of the rights
to exploit the performances of professional players, as
determined on the basis of a sworn expert valuation. This
item will, with the agreement of the board of auditors, be
accounted for on the assets side of the balance sheet and
amortised over the years.

(9) Article 18bis(2) of Law No 91/1981, as amended by Law
No 27/2003, stipulates that companies taking up the
option provided for in paragraph 1 must, for accounting
and tax purposes, amortise the losses in ten annual charges
of equal amount.

(10)

In order to ascertain whether the measure constitutes state
aid within the meaning of Article 87(1) of the EC Treaty,
the Commission has to assess whether (i) the measure
favours certain undertakings or the production of certain
goods by granting an advantage that is of an economic
nature, (ii) whether that advantage is selective, therefore
distorting or
(iii)
whether it affects trade between Member States, and (iv)
whether it is granted through state resources.

threatening to distort competition,

(11)

In the decision to initiate the formal investigation procedure
laid down in Article 88(2) of
the
Commission observed inter alia that:

the EC Treaty,

(a)

therefore

The sports clubs benefiting from the measure perform
an economic activity and are
to be
considered undertakings within the meaning of
Article 87(1). The measure would have allowed the
sports clubs to offset losses suffered in the past against
future profits for a longer period of
the
possibility of extending the period over which losses
can be deducted would have represented an economic
advantage.

time:

(b) The measure is selective since it is addressed only to
the sports clubs governed by Law No 91 of 23 March
1981; it would therefore have constituted sectoral aid.

(c)

least some of

Professional sports clubs perform various economic
activities. At
the clubs perform a
number of these activities on international markets.
Since sports clubs and other economic operators from
other Member States are active on these markets, the
measure in question could have affected intra-
Community trade.

indicated, it would have allowed sports clubs to carry
forward deductible losses for a longer period than at
present, alongside a lower rate of possible deprecia-
tion in the early years. By giving sports clubs a choice
between two alternative methods of taxation, the State
would have allowed these taxpayers to opt for the
method which was more favourable to them, thereby
agreeing to forgo tax revenue.

(12) On the basis of the above summary analysis, the measure
seemed to satisfy all
the necessary conditions to be
considered as state aid within the meaning of Article 87
(1) of the EC Treaty.

(13) Moreover, for the reasons set out in paragraphs 22 to 29 of
the decision to initiate the formal investigation procedure,
the circumstances for considering the aid compatible with
the common market did not seem to be present.

III.

ASSESSMENT OF THE MEASURE

(14) Article 28 of Law No 62 amended Article 18bis(2) of Law
No 91/1981, referred to in paragraph 9, the expression ‘for
replaced by the
accounting and tax purposes’ was
expression ‘only for accounting purposes’.

(15) This amendment rules out the possibility of using for tax
purposes the different accounting method provided for in
Law No 91/1981, which, as amended by Law No 27/2003,
introduced the option. Accordingly, it is no longer possible
for sports clubs to extend the period over which losses can
be deducted for tax purposes.

(16) Although Law No 91/1981, as amended by Law No 27/
2003, continues to grant sports clubs an advantage in
terms of favourable accounting treatment, it no longer, in
its new wording, provides any tax advantage. Moreover,
since the tax advantage previously possible would have
materialised only in the future, (4) the measure has not
granted any tax advantage during the period in which the
amended rules have been in force.

(17) Since the measure no longer involves the forgoing of tax
revenues, it does not involve the use of state resources.
Accordingly, one of the essential tests for the presence of
state aid within the meaning of Article 87(1) of the EC
Treaty is no longer met. The Commission therefore
concludes that, following the amendments made by Law
No 62/2005 (Legge Comunitaria 2004), the measure does
not constitute state aid.

(18) Accordingly, the comments by the Italian authorities and by

third parties need not be examined in detail.

(d) The measure would have implied the use of state
resources in terms of tax revenues forgone. As already

(4) That is, beyond the normal five-year period for carrying forward

losses.

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IV.

CONCLUSION

Article 2

HAS ADOPTED THIS DECISION:

This decision is addressed to the Italian Republic.

Article 1

Done at Brussels, 22 June 2005

The measure which Italy has implemented for professional sports
clubs by way of Law No 27 of 21 February 2003, as amended by
Law No 62 of 18 April 2005, does not constitute state aid.

For the Commission
Neelie KROES
Member of the Commission