At the end of August, UEFA held seven women’s Champions League matches in Spain: the quarterfinals, semi-finals and the final, all between the state of Anoeta, in San Sebastián, and San Mamés, in Bilbao. The competition was suspended in March due to the pandemic and it was the Royal Spanish Football Federation that offered itself as the organizer of this final to eight. The organization accepted the proposal in June and the championship headed to the Basque Country. The games were played behind closed doors and Olympique Lyon won 3-1 at Wolfsburg in Anoeta.
Three weeks later, the government has approved a battery of tax exemptions tailored for UEFA. They are included as an additional provision in the Royal Decree Law that regulates teleworking, approved in the Council of Ministers this Tuesday, so they must still be validated in Congress. The provision was in a previous decree, which was going to allow the use of its surplus to municipalities and local entities, approved on August 4. But fail your validation, the UEFA text had to be put into a new decree. Between first version and the second, which has been accessed by elDiario.es and which will be published soon in the BOE, there is no change.
In the explanatory memorandum, the Government explains that, if the applicable tax regime changes, it is because it takes into account that the fact that UEFA chose San Sebastián and Bilbao to host the final “requires the regulation of a specific tax regime”. The measures are a carbon copy of those that were approved in 2019 for the celebration of the Champions League final that year – at the Wanda Metropolitano in Madrid – and the Euro 2020, in which Bilbao was to host. This competition has been postponed until 2021.
The exemptions to the Champions 2019 and Euro 2020 were approved on December 28, 2018 and caused a certain media stir. They were also an additional provision in a Royal Decree on tax and cadastral measures. UEFA admitted to the sports newspaper As that “the exemption from paying taxes is one of the requirements demanded from candidates to host their tournaments.”
Neither VAT nor corporation tax
The exemptions contemplated in the text are for the organizing entity, participating teams and individuals who provide services to organizers and participants. UEFA and the teams are exempt from corporate tax on the income obtained from the event, as well as from non-resident income tax (IRNR). The income received by individuals who collaborate with the event will not be considered obtained in Spain: that is, they will not be taxed here. Tax advisers they considered this complete ‘tax pack’ unusual during the controversy of 2019.
Although the matches have already taken place, income and corporate taxes have not yet accrued for 2020
On the other hand, the requirement of “reciprocity” will not be required for the refund of VAT to companies or professionals not established in the EU who support or pay fees during the celebration. A foreign company or self-employed that makes expenses in Spain and pays the corresponding VAT can request a refund if their country is in the EU, or if Spain has an agreement with that country. This requirement disappears in activities related to the UEFA event.
Although the women’s Champions League matches have already been held, the regime continues to apply because income and corporate taxes have not yet accrued for the 2020 financial year.
When the original exemption was approved – that of the 2019 final and the European Championship – the PSOE defended that Spain came out winning because the event would generate more money than could be collected by taxes and that the initiative was from the Rajoy stage. The impact analysis report that accompanied the decree law of the Town Halls, which was accessed Europa Press, spoke of a possible “tax loss” that they could not quantify. In any case, the Government reiterated in April its support for Bilbao to host the Eurocup in 2021 due to the “interest it represents for the nation that such an event be held in our country.”