Italian Revenue Agency Reaches Agreement With National Soccer Federation
This week, I’ll be looking at the often-murky world of soccer. It is the planet’s most-watched sport, but it’s never far from controversy, as the FIFA corruption scandal demonstrated. It also has its fair share of run-ins with the taxman too, with the recent raids of two prominent English soccer clubs the latest such development.
However, this is an issue of wider significance, rather than one confined to the tax controversies at the top end of sport. And, appropriately enough, it also touches on the subject of tax competition too.
Some governments are more than willing to offer tax concessions to attract highly skilled – and highly remunerated – workers and investors to their shores. But, to my knowledge, such concessions rarely seem to be extended to professional sports people, including in the soccer world.
The issue of executive pay, the king’s ransom that some soccer players receive every week, and taxation is highly divisive. Some people are very comfortable with the idea that those on mind-boggling salaries should pay half of their income in tax. Others argue that, in principle, rates of income tax approaching 50 percent or more are wrong, even confiscatory. The reality remains, however, that businesses and top-league soccer clubs (mostly those in Europe) can struggle to recruit top talent when high rates of tax are in place.
Maybe harsh realities call for pragmatic solutions. Spain, for example, came up with the “Beckham Law,” (named after the famous soccer player when he moved to Madrid) whereby individuals can choose to be taxed as a non-resident for a temporary period. Italy deals with these issues in a somewhat less adversarial way, through the agreement of an annual tax protocol between the revenue agency and professional clubs. So perhaps other professional leagues would also benefit from similar measures and codes of conduct.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look
