Preliminary observations on the tax aspects of Esports within the Italian legal framework

Abstract

This contribution, with some adaptations, reiterates the intervention of Prof. Fabio Saponaro at the conference “International Taxation, between Sport, Esports, and Gaming,” organized by the University of Salento (Italy) on March 7, 2024. The event was of scientific relevance to the world of eSports, involving scholars and experts in the field, as well as the participation of Italian and international sports and eSports authorities.One of the topics discussed at the conference was the fiscal issues related to the phenomenon of virtual sports, which have now reached a global spread. The legal phenomenon under examination has, to date, been regulated by only a few countries (including France, South Korea, Brazil, and Mexico), although the transnational nature of egamers’ activities would require a clear and coordinated regulatory framework at the level of international taxation, as the risk of double taxation on income produced is becoming a tangible concern.In the intervention, starting from the legal definition of esports and identifying the key features of the phenomenon, including from a tax perspective, the tax treatment of egamers in the Italian experience is examined. The discussion begins with domestic tax rules, adapted to the case in question, and progresses to the interpretation of conventional, bilateral, or multilateral rules on double taxation (generally aligned with the OECD Model Convention), which are indirectly concerned with regulating the phenomenon. The contribution highlights some concerns regarding the current lack of legal certainty faced by legal practitioners when dealing with esports, as well as the opportunity to move beyond this transitional phase towards a new and more comprehensive legal framework. This would apply both to the national level (in Italy, on this matter, Bill No. 970, “Regulation of Videogame Competitions,” was presented on December 19, 2023) and to the supranational and international levels, in order to ensure that operators can navigate within a framework of legal certainty. This would also promote and support public and private initiatives aimed at contributing to the development of a more competitive European esports landscape compared to other extra-European experiences.The relevance of this contribution is confirmed by the recent announcement from the International Olympic Committee (IOC) regarding the celebration of the first esports Olympics in 2025, in Saudi Arabia.Preliminary observations on the tax aspects of Esports within the Italian legal framework