Management challenges of cross-subsidies in the corporate tax system

Abstract

One of the most unique forms of support in Hungarian sport is through the corporate tax system. Companies have the possibility to transfer part of the tax directly to the sports organisations. The recipient sports organisations must provide details of the use made of the support received. The scheme has been operational since 2011. During this period, the managers of sports organisations have faced a number of challenges. To receive the grant, a sports organisation must prepare a development programme or find a company willing to support it. Research shows that this is a very difficult task for smaller clubs in rural areas. Managers have to keep a constant eye on the changing legal environment, as changes are made every year. In addition to subsidies, there is a need to secure a co-payment, which is a difficulty for facility development projects. Some of the costs of the organisations cannot be financed from the TAO grant. Since the introduction of the scheme, the proportion of sponsorship contracts has been much lower. Overall, the grant scheme has helped the sports sector a lot. However, sport managers have constantly faced new challenges.