Spanish justice has confirmed that FC Barcelona must pay nearly 23 million euros ($24.7 million) in taxes on payments made to football agents between 2012 and 2015.
The Administrative Chamber of the National Court (Spain’s highest criminal court) has upheld the decision of the Central Tax Tribunal (TEA) against which Barcelona had appealed. This was announced by the court in a statement on Friday. The National Court “rejects FC Barcelona’s appeal against the TEA’s decision of June 2020,” the statement said. The TEA had ordered Barcelona to pay almost 23 million euros in personal income tax (IRPF). The tax was levied on payments made to football agents. The tax authority considered that payments to players’ agents, “given that they provide their services to the footballers and not to the club, have the nature of employment income and are subject to withholding at the time of payment”.
FC Barcelona, on the other hand, considers that these payments “correspond to the remuneration agreed for the services rendered to the sports entity and, in this sense, it is not appropriate to consider as player’s remuneration the amounts corresponding to the services rendered to the club”.
The TEA ruling stated that “the payments made by the club have been made in the name and on behalf of the players, who are the actual recipients of the services provided by the agents, whereas it appears that the agents provide a service on behalf of the club or represent the club”. The ruling states that “the club appears to be rewarding the agent for non-existent services, when in fact part of the remuneration is being paid in this way to the player for services provided to the club, with the corresponding tax implications”.
The aim is to obtain a more favourable tax treatment than that implied by the actual transaction,” the Court’s note added. Upon learning of this decision, FC Barcelona announced that it would appeal to the Supreme Court, pointing out that “this ruling does not currently entail any payment obligation for the club, as this contingency is duly provided for in the annual accounts.”
