Two sentences of October 28 of the Fourth Section of the Contentious-Administrative Chamber of the National Court against Atlético de Madrid, for an amount that exceeds 600,000 euros; and a third on September 6 against Sevilla FC, for 2.3 million euros, have endorsed the Tax Agency in the pulse that it has maintained since 2015 against the alleged fraud of the main Spanish clubsits players and the all-powerful agents of the world of soccer, who receive millionaire payments for the transfers of the players.
These rulings of the National Court against the Sevilla team and Atlético de Madrid maintain the criteria established since 2019 against the payment of money made by Real Madrid, FC Barcelona and Valencia CF to different agents, which also benefited the players. In any case, the claims presented by Real Madrid and by the former Valencia CF player Víctor Ruiz will mean that the last word on the million-dollar sanctions against the ‘nobility’ of Spanish football will be held by the Supreme Court, which has admitted at least two appeals on the facts.
For the moment in the recent sanctions, to which EL PERIÓDICO DE ESPAÑA, from Prensa Ibérica, has had access, the magistrates oblige the Atletico Madrid to pay the Treasury an amount of 469,756 euros for having deducted VAT from the payment to player representatives in 2010 and 2013 respectively, also reducing the joint cost of up to six signing, transfer or renewal operations.
multiple players
Thus, The National Court confirms the position of the Central Economic Administrative Court and establishes the amount of the resources at 247,290 and 222,466 euros, respectively. In the first case, the order affects the Non-resident Income Tax of 2010 in operations carried out with the representative entities NCS Universal Rights BV and IMG Overseas. The second establishes the sanction on the Non-Resident Income Tax of 2013 in operations carried out by Atlético de Madrid with the companies Essel Sports Management and SMTM. Among others, it was interventions in the contracts with the soccer players José Antonio Reyes, José Manuel Jurado and Toby Alderweireld.
The Treasury Inspectorate also disavowed Sevilla FC’s version, which defended that the agents provided a service commissioned by the team: “Specifically, the claimant does not provide any document evidencing any procedure designed by the club to determine its needs, nor how the budget for the supposedly contracted services is set, nor the mechanisms or protocols to control the correct fulfillment of the work entrusted to the agents, nor the establishment of basic lines of action that allow the task of the different agents to be homogenized”, highlights the judgment of September 6, which alludes to the actions of a person linked to the agency Promoesport Baster BCN, SL, who acted as agent for the player Antonio Luna, who in 2013 had been transferred to RCD Mallorca.
Valencia CF
In the case of Valencia CF, another judgment of the National Court, this one of March 23, confirms two resolutions, of June 24, 2020 and January 25, 2021, in which the Central Economic-Administrative Court forced the Valencian team to pay 2,234,905 euros.
One of the affected players is Víctor Ruiz, now out of the Valencian club, who from Naples signed a contract with the Ché team on August 30, 2011. On July 25, 2016, the Regional Inspection Unit of the Special Delegation of Valencia made a provisional settlement to the player for the concept of Personal Income Tax (IRPF) for the years 2011, 2012 and 2013, with an amount of 163,485 euros, as specified by another sentence of June 15, to which EL PERIÓDICO DE ESPAÑA has had access. The regularization occurred because the athlete had not declared the payments made by Valencia CF to his agent.
And as proof that the agent worked for the player, and not for the team, the Treasury refers to one of the invoices issued by the Tacle Players 80 SL agency, participated by the player’s intermediary, and that had been drawn “as the first payment of intermediation fees in the transfer of federative rights of the professional soccer player from SS Napoli to Valencia CF SAD“.
This society issued to the player an invoice for 120,000 euros whose concept was, according to the sentence: “Commission for the negotiation of the employment contract of the professional soccer player with Valencia CF SAD for the 2011-2016 sports seasons”, after leaving the Italian team for Valencia CF, which in 2014 was ceded to Villarreal. He now plays for Real Betis.
jorge mendes
In the same sense, the Contentious-Administrative Chamber confirmed in another five sentences of May and June 2021 the decisions of the Treasury that established that the Real Madrid irregularly deducted VAT from the funds paid to agents and players for 3.2 million euros. Only in the case of the former Real Madrid coach Jose Mourinhowhose representative is the owner of Gestifute International Limited, jorge mendes, the sum was 400,000 euros.
In the case of the Portuguese preparer, the Treasury Inspectorate considered that, despite the fact that the regulations are “clear and emphatic”, the agent’s remuneration was paid by Real Madrid, which meant for the coach “a lower amount of his earned income”, which if done correctly would have meant higher taxation due to the fact that as income from work, the expenses incurred when paying the agent could not have been deducted since this type of expense is not on the assessed list of expenses that can be deducted in the personal work income section.
Therefore, the Treasury considered that Mourinho “hid from the Tax Administration the payments made by the Real Madrid to the entity Gestifute”, which were carried out on its behalf. “These amounts are classified as income from work and must be included in the tax base of Mourinho’s personal income tax. Therefore, there is concealment of data from the Public Treasury in the personal income tax returns for the 2010-2011 period,” the Inspectorate continued. However, the National Court annulled the tax assessments for the years 2010, 2011 and 2012 against the current Roma coach for having prescribed the sanction.
In the aforementioned sentence of September 6 against Sevilla FC, the Contentious-Administrative Chamber of the National Court itself recalls that in two other resolutions, these of June 12 and May 13, 2019, it was already established that FC Barcelona favored with its payments an agent that its ex-player Gerard Piqué pay less in personal income tax.
El ‘mode of operation’
The ‘modus operandi’ of the clubs whose sanctions are now confirmed by the National Court was detected by the Treasury Inspection, which discovered that the teams paid the commissions of the players’ contracts to the agents. This operation fiscally benefited “the clubs, since they absorb the cost of VAT, which is deducted, and reduces the joint cost (players and agents) of the transfer, transfer or renewal operation“, indicates the sentence of September 6 of the Fourth Section of the National Court against Sevilla FC.
But this performance also favored the footballers: “These were freed from paying the VAT quota, or managed to lower their taxation in the IRPF“, recall the contentious-administrative magistrates of the National Court.
Finally, the Central Economic-Administrative Court, confirming the criteria of the Treasury Inspectorate, understood that said payments, made by the main teams to the players’ agents, prevented them from having to pay them for the services rendered. And for this reason, he established that the sums of money paid had to be attributed to the income of the footballers: “Since ultimately the services provided referred to elements that obviously affected and benefited the athletes“, specifies the aforementioned sentence.
