The "Sports Industry Development Act," which was amended and took effect on July 23, 2025, not only lays a more stable foundation for the development of Taiwan's sports industry but also opens up highly attractive opportunities for investors interested in the sports field. Furthermore, the Executive Yuan upgraded the original "Sports Administration" under the Ministry of Education to the "Ministry of Sports" on September 9, with the goal of encouraging and guiding policies to promote a national fitness trend, boost the development of the sports industry, and enhance national sports competitiveness.

Several key highlights of this amendment include the expansion of government and private resource injection, the improvement of professional sports, the acceleration of amateur professionalization, and the provision of tax incentives. These measures provide a substantial stimulus for private capital investment.

This article focuses solely on the analysis of the tax incentives for the sports industry resulting from this amendment.

I. Business Tax (No Amendment This Time)

According to Article 24 of the Act, admission fees for sports events or activities organized by sports associations are exempt from business tax if they meet certain criteria.

The "Regulations Governing Exemption of Business Tax on Admission Fees for Sports Events or Activities Held by Sports Associations" stipulate that admission fees for the following types of sports events or activities organized by a sports association are exempt from business tax:

• Various single-sport championships, leagues, open tournaments, tours, grand prix, ranking matches, exhibition matches, invitational matches, challenge series, series matches, integrated scoring competitions, classics, or qualifying events.
• Professional sports events.
• Performances, rallies, or cheering activities related to the above two types of sports events, intended to create momentum or cheer for Taiwan's athletes.

II. Individual Income Tax (No Amendment This Time)

According to Article 26-1 of the Act, an individual who donates to athletes through a "dedicated account" established by the competent authority may claim the donation as an itemized deduction when filing their individual income tax return, and the donation is not included in the annual total gift amount. However, the amount of the itemized deduction varies depending on whether there is a "designated recipient" ("Implementation Regulations for Itemized Deduction of Individual Donations to Athlete Dedicated Accounts and Income Tax"):

1. No specific athlete designated (Funds used broadly)

• Deductible amount: Fully deductible, with no upper limit. This is treated as a "donation to the government".

2. Specific athlete designated

• Deductible amount: Capped at 20% of the total gross income. This is treated as a "donation to educational, cultural, public welfare, charitable organizations, or groups".
• Restriction: Donations to athletes who are a spouse or within two degrees of kinship by blood or marriage to the donor are not eligible for this deduction.

III. Profit-Seeking Enterprise Income Tax (Focus of this Amendment)

This amendment significantly increases the incentive for private resources to be invested in the sports industry, particularly by granting favorable tax incentives for donations made by profit-seeking enterprises. This provides substantial financial return and enhances the corporate social image for businesses acting as "donors" in sports promotion.

1. Corporate Donations to Sports Activities are Fully Deductible as Expenses, Without Amount Limit

Article 26 of the Act stipulates that donations made by a profit-seeking enterprise for the following sports activities may be deducted as expenses according to Article 36, Paragraph 1 of the Income Tax Act, without amount limit:

• Donating to legally registered sports associations.
• Nurturing and supporting sports teams or athletes.
• Promoting sports activities for the enterprise's own employees.
• Donating for the construction of sports facilities or sports equipment and supplies to government agencies and schools at all levels.
• Purchasing tickets for sports events held domestically and donating them to students or disadvantaged groups through schools or non-profit organizations.
• Organizing events recognized by the Central Competent Authority as promoting national sports development (Newly Added).

This amendment expands the scope of eligible tax incentives, allowing enterprises that support mass sports activities to also enjoy tax benefits, thereby encouraging corporate participation in promoting national health.

2. Increased Additional Deduction Percentage

Article 26-2 of the Act states that for donations made by a profit-seeking enterprise through a "dedicated account" established by the competent authority to recognized professional or amateur sports enterprises or key sports event organizers, the deductible amount for calculating profit-seeking enterprise income tax is substantially raised from the original 150% to 175% of the donation amount.

• Standard Cap: Generally limited to NT$10 million.
• Exception Clause (Breaking the Cap): If the donation recipient is a "Key Sports Event" or "Key Professional/Amateur Sports Enterprise" specially approved by the competent authority, the NT$10 million limit does not apply, and the 175% deduction can be fully utilized.
• Tax Benefit Analysis

The increase in the deductible amount means that for every NT$1 million donated, NT$1.75 million can be deducted when calculating the profit-seeking enterprise's income32. This additional NT$750,000 in deduction allows the enterprise to achieve a higher tax-saving benefit without affecting the actual amount of the donation.

For example, based on a corporate income tax rate of 20%^.

As shown in the table above, for the same donation amount, the "net cost" for the enterprise investing in the sports industry is significantly reduced, improving the efficiency of capital utilization.

• Note: The portion of the additional deduction for corporate donations to professional or amateur sports enterprises and key sports event organizers should be included in the enterprise's minimum tax amount.

3. Anti-Abuse Mechanism: Related Party Clause

To prevent enterprises from using "left-hand donations to right-hand recipients" for tax avoidance (e.g., a parent company donating to a team operated by a subsidiary), the Act establishes strict related party restrictions.

If the profit-seeking enterprise and the recipient organization are related parties (e.g., shareholding or substantial control relationship):

• Only 100% deduction applies: The deduction reverts to the general expense recognition, with no additional deduction benefit.
• Amount Restriction: Still subject to the NT$10 million limit (unless specially approved).