Allocation of taxes is justified at least if the income earned during the career in sports is likely to be higher than the income earned after the sports career.
An athlete is entitled to defer earnings from sports, with part of the earnings not considered taxable income when earned, but when they are factually withdrawn. In practice, this means that an athlete can minimise taxes when the accrual of income and taxes paid on it can be allocated to several tax years.
In practice, this means that the athlete’s annual tax rate will be lower compared to paying higher and higher taxes on higher income at the annual level. Allocation of taxes is justified at least if the income earned during the career in sports is likely to be higher than the income earned after the sports career.
Sports income can be allocated through funds. Sports income refers to monetary rewards from sports competitions and other competitive sports or playing and comparable income as well as income from sports-related advertising agreements or other cooperation agreements if the contracting parties are the athlete, sports federation and cooperation partner together.
An athlete whose sports income is a minimum of EUR 9,600 before deducting professional expenses is entitled to transfer a maximum of 50% of the gross sports income to an athlete’s fund. The maximum amount is EUR 200,000 per year.
The income transferred to the athlete’s fund can primarily be recognised as income within 2–15 years of the end of the sports career. The sports career is considered to have ended if the sports income remains under EUR 9,600 on two consecutive years and the athlete does not demonstrate to the athlete’s fund that they will continue their career in sports or if the sports career has ended due to injury or notice by the athlete to the fund.
The above sums can change annually along with amendments to tax legislation. If the athlete dies, the funds in the coaching fund and athlete’s fund are considered taxable income for the year of death in full.
More information: urheilijoidenrahasto.fi
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