April 11, 2021

The CJEU definitively dismisses the appeal of FC Barcelona for the tax regime


An image of the Camp Nou.

An image of the Camp Nou.
EP

The Court of Justice of the European Union (CJEU) has annulled a ruling of the General Court that endorsed the tax regime of FC Barcelona, Athletic de Bilbao, Real Madrid and Osasuna, thereby definitively rejecting the appeal that the Barça club had filed against the decision of the European Comission (EC) to order Spain to recover the state aid from which those clubs had benefited.

In a ruling published this Thursday, the CJEU “annulled the ruling of the General Court by which the Commission’s decision that qualified the tax regime of four Spanish professional soccer clubs as State aid” “The appeal that Fútbol Club Barcelona had filed is definitively dismissed” against it.

The General Court had annulled in February 2019 the decision of the European Commission to order Spain to recover the State aid that considered illegal from which these clubs had benefited, thus endorsing the tax regime of the four entities as sports corporations.

The Commission understood that these clubs had benefited since 1990 from a tax rate of 25% instead of 30% and demanded that Spain in 2016 recover up to five million euros per club in unpaid taxes.

The case dates back to Spanish law of 1990 that forced professional sports clubs to reconvert themselves into sports limited companies, with the aim of promoting transparency in management.

However, an exception was made so that clubs that had obtained positive economic results In previous years, they could choose to continue operating in the form of sports clubs, a measure to which Fútbol Club Barcelona, ​​Club Atlético Osasuna, Athletic Club and Real Madrid were welcomed in the First Division.

As non-profit legal entities, these four clubs were thus entitled to a specific type of tax on their performance, which until 2016 it was lower than the tax rate applicable to sports corporations, which the Commission considered an aid in the form of an illegal privilege which was not compatible with the internal market.

Brussels ordered Spain to abolish that regime and to recover “immediately and effectively from the beneficiaries the amount of the aid granted.”

But after an appeal filed in Luxembourg by Barcelona and Athletic de Bilbao, the TGUE concluded that the Commission had not sufficiently proven that these football clubs had enjoyed an advantage derived from the tax regime of non-profit organizations.

Among other arguments, in its opinion, against which there is no recourse, CJEU maintains that “the controversial aid scheme could favor, from the moment of its adoption, to the clubs that functioned as a non-profit organization compared to those that functioned as a sports limited company, thus giving them an advantage “.

“The Commission was not obliged to examine, in the contested decision, the impact of the deduction for reinvestment of extraordinary profits nor that of the possibilities of transferring to future years of this deduction in the form of a tax credit and, in particular, whether that deduction or those possibilities would neutralize the advantage resulting from the reduced tax rate“adds the Luxembourg-based court.

The CJEU concludes, therefore, that the General Court made “an error of law in ruling that the Commission was obliged to carry out such an examination, requesting, if necessary, the relevant information” and, consequently, “dismisses the appeal filed by FC Barcelona “.

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