Athletes taking part in the Paris 2024 Olympic Games (OGs) are likely to receive various types of income.
1. Support for top-level athletes from the French National Olympic and Sports Committee (CNOSF)
This is personalized aid allocated by the CNOSF to compensate for loss of income and additional expenses incurred as a result of taking up competitive sport.
The tax system for this aid is as follows:
- the part of the allowance that compensates for the loss of income suffered by the persons concerned is taxable as salary;
- the portion of the allowance that is used to cover the specific expenses incurred by athletes in training for and taking part in sporting events is eligible for the exemption provided for special expense allowances under article 81, 1° of the French General Tax Code (FGTC). The amount of this exempt fraction is set on a flat-rate basis: it corresponds to 25% of the annual social security ceiling, i.e. 11,592 € in 2024.
2. Olympic and Paralympic performance bonuses
Paris 2024 Olympic medalists will receive the following bonuses:
- 80,000 € for a gold medal ;
- 40,000 € for a silver medal ;
- 20,000 € for a bronze medal.
These bonuses are also subject to income tax in the category of salaries and wages under the rules of ordinary law in accordance with article 79 of the FGTC.
However, under article 163-0 A ter of the FGTC, athletes can opt, when filing their tax return for the year in which the premiums were received, to spread the bonuses equally over the year in which they were received and the following three years, i.e. over a total of four years.
This arrangement may be combined with the smoothing mechanism provided for in Article 84 A of the FGTC. The taxpayer may request that the amount of these salaries from the practice of their sporting activity be determined on the basis of the average of the salaries for the year in which they are received and the four previous years or the two previous years at their discretion.
On the other hand, this arrangement is incompatible with the quotient system provided for by Article 163-0 A of the FGTC, which consists of adding a quarter of the exceptional income to the usual income, then multiplying the corresponding additional tax by four.
Under domestic law, remuneration paid in respect of sporting services provided by an athlete who is not resident in France for tax purposes is subject to a withholding tax of 15% in principle in accordance with the provisions of Article 182 B of the FGTC.
It should be emphasized that such remuneration paid to athletes resident in States or territories linked to France by a tax treaty is only taxable in France if the treaty does not preclude it. It is therefore necessary to examine each of the tax treaties, if any, signed between France and the athlete's state of residence for tax purposes.
The taxation of income received by athletes taking part in the Paris 2024 Olympic Games can only be optimized after an analysis of each athlete's situation. Lobe Law, lawyers specializing in tax and sports law based in Paris 7, is delighted to assist its clients in this respect. Please feel free to contact us!