Home » The EU Court condemns Spain for the facilitated regime granted to Real and Barcelona

The EU Court condemns Spain for the facilitated regime granted to Real and Barcelona

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Fútbol Club Barcelona, ​​Pamplona’s Atlético Osasuna, Bilbao’s Athletic and Real Madrid received illegitimate state aid. This was established by the Court of Justice of the EU, after a long legal battle, effectively annulling a decision of the EU Court of 2019 and giving reason to the European Commission which had qualified the tax regime of four Spanish professional football clubs as State aid. . For the Court of Justice, the EU Court has committed an “error of law” and therefore the original decision of Brussels remains valid.

The condemnation of Brussels

The Commission had established in 2016 that these four clubs, for about 20 years, had paid taxes as non-profit sports clubs, a treatment deemed absolutely unjustified and contrary to the internal market, and had therefore asked the Spanish government to recover those which it considers illegal state aid. In particular, the Commission focused on the Spanish law of 1990 which obliged professional sports clubs to convert into sports limited companies, with the aim of promoting transparency in management, but which ensured that these four clubs kept their structure ” associative “a tax rate of 25% instead of 30%. The Commission’s investigation, opened in 2013 and formally closed in March 2014, concerned 7 Spanish clubs (Barcelona, ​​Real Madrid, Valencia, Athletic Bilbao, Atletico Osasuna, Elche and Hercules) in relation to three issues: tax savings 5% guaranteed to the 4 clubs that have maintained the form of associations; financial interventions in favor of the three Valencian companies; the urban planning and accounting favors of the municipality of the capital to Real Madrid.

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The EU investigation

The Sports law of 1990 obliged all Spanish professional sports clubs to become joint stock sports clubs. Football clubs whose balance sheets had closed in the previous 4-5 years were exempted. As noted by the EU Commission, however: “No specific club was mentioned, but only four of them, Real Madrid, Athletic Bilbao, Osasuna and Barcelona benefited from this exemption and did not have to become joint stock sports clubs. Since then, no other team, even if managed economically, has been able to regain its previous status ”. The tax treatment of these four clubs – the EU Commission underlined – differs from that applicable to joint stock sports clubs. In fact, they can benefit, as non-profit entities, from the partial exemption from corporation tax provided for by Spanish law with a reduction in the rate of tax due on commercial income to 25% compared to the current general rate, which is 30%. But although by law the four clubs are considered non-profit organizations, they perform, as Serie A teams, professional activities at profit in competition with other major European professional football clubs.

Unjustified aid

According to the EU Commission, therefore, “Spain has granted the four clubs Real Madrid CF, Athletic Club Bilbao, Club Atlético Osasuna (Navarra) and FC Barcelona operating aid that is not justified under Article 107, paragraph 3, letter c), of the TfUe “. Spain has adapted national corporation tax legislation to abandon this discriminatory treatment from January 2016, but to eliminate the advantage accumulated over time, clubs must pay unpaid taxes, since they have benefited from the reduced rate for over twenty years “without any objective justification”. For Brussels, the amounts to be recovered range from zero to € 5 million per club, but the precise amount to be repaid will have to be set by the national authorities as part of the recovery procedure.

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