Running Contests and Sweepstakes in Italy

Posted in: ApplicationsLast update: 05/06/18

In Italy, contests and sweepstakes are subject to complex regulations. The main difficulty resides in the fact that these regulations are open to interpretation. If you want to organize a sweepstakes or contest in Italy, you must take a lot of things into account. And you must respect the regulations if you wish to avoid the severe penalties imposed when procedures are not followed. Sonia Travaglini from Promosfera, an Italian agency specialized in organizing contests and sweepstakes, takes us through the steps involved in organizing a promotion in Italy.

According to Italian law, contests and sweepstakes in Italy are subject to a series of distinct compliances. Simply drawing up the terms and conditions is not enough, you must also comply with the following administrative procedures:

 

Contests in which prizes are awarded directly also require compliance with a series of procedures. These are similar to those for sweepstakes, albeit slightly simplified.

 

Terms and conditions

There are no models for the drawing up of terms and conditions. However, the terms and conditions must include all the information stipulated by regulations.

 

Official form

You must complete a complex official form with all the basic information of the promotion and send it via a specific webpage.

 

Guarantor

To organize a contest in Italy you must stipulate a guarantor, or make a deposit in the Bank of Italy, to guarantee the total value of the prizes promised. Compliance with this step is very important, because otherwise you won’t be able to complete the official form and send the documentation required to activate the promotion.

 

Sending the documentation

You must submit the documentation of the sweepstakes/contest to the authorities at the latest 15 days before the start of the promotion.

This documentation must be sent online to the Ministry for Economic Development via the dedicated webpage. The documentation should be sent by a physical and legal Italian resident with a digital signature that has been authorized for such use. The promotor must also be Italian or have an Italian tax representative.

 

More important aspects

As well as respecting the process and the indicated deadlines, you should pay close attention to the following aspects:

  • Participation Microsites
  • Awarding the Prizes
  • Tax Obligations
  • Winner Management
  • Delivering the Prizes
  • Non-Profit Organization

 

Participation microsite

It’s important to use software and applications that guarantee the correct functioning of the promotion and the rewarding of public trust. The server of the contest microsite should be located in Italian territory: Easypromos has that part covered!

 

Awarding the prizes

The winner selection, whether via sweepstakes or according to skill, should be carried out in front of a competent public notary based in the province and region where the prize/s are to be awarded. In the case of Instant Win contests, you’re required to draw up an allocation agreement with the public notary upon completion of the sweepstakes.

 

Tax obligations

Promoters must pay taxes on prizes in contests and sweepstakes in Italy. Tax obligations consist of the following:

  • 25% of the sale price of the prize: this is a withholding tax and must be paid by the promoter.
  • 22% VAT on the value of the purchase: it’s not possible to compensate/recover VAT on the goods and services purchased for awarding as prizes in a contest or sweepstakes.

Alternative to VAT, in the case of goods or services that don’t have VAT, it’s necessary to apply a substitute tax of 20% on the purchasing value.
The tax system differs if the contest/sweepstakes participants are not consumers.

It’s important to notify winners in accordance with the terms specified in the terms and conditions of the contest Click To Tweet

 

Winner management

The winner management is one of the most important phases, as it’s through this process that promises made to the public are fulfilled. It therefore requires a great deal of care and precision.

It’s important to notify winners in accordance with the directions specified in the terms and conditions of the contest, providing exact instructions to how the winners can claim their prize.

 

Delivering the prizes

Prizes must be delivered in accordance with the terms and conditions. Italian law stipulates that no more than 180 days can pass from the day the winners were selected. Delivery of the prizes should be certified and verifiable for the sweepstakes to be considered closed.

 

Non-profit organization

Italian legislation states that in cases where it’s not possible to deliver the prize/s to the winner/s, or when a prize remains unassigned, such prizes should be donated to a non-profit organization previously designated in the terms and conditions. The contest/sweepstakes promotor is not allowed to keep the prize/s.

 

Social media sweepstakes – new

Based on recent interpretations of the current regulations by the competent ministry, now in Italy, it’s allowed to carry out direct sweepstakes based on interactions on social media, if the value of the prize per winner is equal to or less than 25€.

This means there’s is no data collection and therefore no need to host the contest and the user data in a server in Italian territory. Neither is it necessary to submit the before-mentioned form to the ministry, but it is important to write up decent terms and conditions for the sweepstakes.

The condition is that each user can not win prizes for more than 25,82 euros (VAT included) per year, so the promoter must control the users that win more than once during a year and disqualify those that exceed the maximum prize value.

This means that it is allowed to carry out social media sweepstakes with Easypromos in Italy, as long as the value of the prize is less than 25€. If the value of the prize is higher, it’s necessary to go through the process of registration with all that it involves.

From a legal point of view, this type of promotions are unilateral promises and that’s why we consider that it’s important to write terms and conditions that explain the rules for participation, duration of the contest and characteristics of the prizes, in compliance with the current regulations of consumer protection, protection of the public faith, etc. Making available clear and certified terms and conditions represents a guarantee of transparency, and protection of the organizer itself in prevention against possible actions by consumers (not always in good faith) that may even cause damage to the brand image.

 

Promosfera can help with your contests and sweepstakes in Italy

In conclusion, it’s not that difficult to organize promotions in Italy. And the advantage is that any type of promotion is allowed: purchase-based, chance-based, via software, and so on. However, it is vital to respect the procedures imposed by the regulations.

Promosfera can help you if you want to organize any type of promotion, contest or sweepstakes in Italy. They offer the service of writing specific terms and conditions for each promotion, also for direct social media sweepstakes.

 

Sonia Travaglini

Managing Director at Promosfera
Contact information: info@promosfera.it
http://www.promosfera.com