Section 235 of the Taxes Consolidation Act, 1997 provides an income tax exemption to sporting bodies, which have been approved by Revenue on the basis that the body has been established for, and exists for the sole purpose of promoting athletic or amateur games or sports. The exemption extends to the amount of the income of the approved body which has been, or will be, applied to the sole purpose mentioned.
Sections 610 and Schedule 15, Paragraph 37 of the Taxes Consolidation Act, 1997 provides a capital gains tax exemption in respect of chargeable gains accruing to sporting bodies to the extent that the income of the sporting body is exempt from income tax or corporation tax as the case may be. Where a sporting body realises a capital sum from the disposal of an asset the exemption applies only to the extent that the proceeds are applied for the sole purpose of promoting athletic or amateur games or sports.
The administration of tax exemptions for sporting bodies is a matter for the Revenue Commissioners. Revenue has emphasised that the detailed application of funds has to be considered specifically, and in context, in each individual case, to determine whether any implications arise for the tax exemption, or the body's approval by Revenue. Revenue has also confirmed that while there is no specific requirement in section 235 regarding the type of clauses to be included in the Rules and Constitution of tax exempt sporting bodies, those bodies that formally apply for an exemption are required to include income, property and winding-up clauses which ensure that no portion of the bodies' income or property is transferred directly or indirectly by way of dividend, bonus or otherwise howsoever by way of profit to the members. Revenue has also confirmed that bodies granted sporting tax exemption are subject to periodic risk-focused review towards ensuring that the terms of the exemption continue to be fulfilled. All relevant matters, including adherence to any income, property and winding-up clauses are considered in the context of such reviews.