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Thread: Tax changes in la liga

  1. #1
    The Observer
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    Tax changes in la liga

    I'm surprised no one discussed this till now ? it's been causing a fuss over the spanish press the last couple of days
    here is a kick start to those who need a round up

    The taxing issue affecting La Liga

    The Spanish league could very soon lose one of its handiest advantages, an advantage which puts its clubs in pole position in the European transfer market - namely the low tax charges foreign players enjoy in La Liga.

    This week Spanish football was hit hard with a government decision. A painful blow to all the top clubs and one that has put them all on alert, to the extent that rumours of a potential strike are flying around.

    No one likes financial interference and that is precisely the mindset of the millionaire clubs in the country. It was back in 2004 when, coinciding with the arrival of star David Beckham, Spain decided to lower the taxes for foreigners working in the country in an effort to encourage the arrival of top scientists, investigators and other qualified workers in the hope that a lax tax system would be an attraction for all kinds of world class stars.

    This Ley Beckham - the Beckham Law - worked wonders in football at least. It opened up the market for Spanish clubs as the most expensive players could be offered juicier contracts knowing that they would have to pay just 24% tax, applicable on their first six years working in the country.

    Clubs have revelled under the comfortable tax law and even pay the players' taxes, a very attractive situation for the very best footballers on the continent. But now the government has had a change of heart and will increase that 24% to 43% by 2010. That is why the Spanish League Association has quickly positioned itself by saying that if the law is approved, the competition will go on strike.

    The government admitted recently that the Beckham Law, approved to favour the arrival of 'the gifted ones', hasn't worked at all and all that has happened is that football clubs have made the most of the situation by offering very high wages.

    At the moment, foreigners in Germany pay 45%, the highest taxes in Europe, followed by Italy's Serie A with 43%, the English Premier League and the French Ligue 1 with 40% and Holland with 30%. However, England will move to the top of that table in April when the country moves to a 50% tax band.

    Spain has been, and is still, a football fiscal paradise. This summer has been a perfect example. Kakà, Cristiano Ronaldo, Karim Benzema and Zlatan Ibrahimovic never wavered when the offer from Spain came their way. They all have net wages and, as usual, the clubs take care of paying their laughable taxes every year.

    The Beckham Law could be abolished on January 1, 2010. Fortunately for Real Madrid and FC Barcelona, it won't be applied retrospectively, leaving the aforementioned stars untouched, but meaning all the foreigners working temporarily in Spain, having resided in the country for less than 10 years and earning more than €600,000-a-year, will, from then on, pay 43% tax.

    In England, the 50% rate will apply to earnings over £150,000.

    "At the Spanish League Association we are very worried,'' said its president, José Luis Astiazarán. "This new regulation could have very negative consequences. It would stop this league from being the best in the world and would affect, negatively, in other aspects such as the stadium attendance figures and lower the television viewers. This new law would cost Spanish football around €100 million."

    Portuguese midfielder Simao, from Atlético de Madrid, voiced his concern too. Although he is not affected because he has been working in the country for 12 years now, he did point out that "the same thing happened in Portugal and it was detrimental for players, having to pay so much tax. It's a delicate matter.''

    In any case, and judging by Mr Astiazarán's words, anyone would say that the Italian, French, English and German leagues are, therefore, weak, non-attractive and 'cheap', since they can't afford to pay foreigners. But the truth is that all those leagues have a lot more foreigners in the competition than the Spanish Liga. The Premier League has 65.5% foreigners, the Bundesliga has 43.7%, Serie A has 41.7%, Ligue 1 has 41.9 % - the Spanish Liga has 35.8%. The figures don't really justify a strike or the claims from Astiazarán regarding the catastrophic effects tax would have on the competition.

    The new law has yet to be approved in the Spanish Parliament, and if it is, be prepared for a full-blown tantrum in the Spanish league.

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    The Reckoner
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    Mixed feelings really, there is no doubt they are pad enough and from a socialist way of thinking there is no reason why they should be paying such a comparably low rate. Not so well clued up on the social equality of wider Spain and the tax rates that are there for lower bands so not entirely well informed to judge. However the player are not going to just want to give up 20% of their earnings- therefore I can see the clubs will be the ones to suffer, then the league will follow.
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    wow ... that is a big deal.
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    It is a big deal especially for Barca & Real who will have to pay the difference from their pockets which will affect their budget and spending greatly
    i never liked the idea of making a law (regarding anything related to money ) and applying it or changing with a short time limit.
    clubs need time to adjust their finances and salary caps. taking an additional 20+ % of the wages in the form of taxes will have major major negative aspect , taking into consideration that the salaries do form a large chunk of the clubs budget
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    If I have to look for positives here I`d say it will focus our market interest in likes of Villa, Silva or Navas.
    But yes, overall it`s bad news for Spanish clubs.

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    Horrible timing. I know the Spanish government could use all the tax revenue it can get its hands on right now, but almost every club in the league is in severe debt and the tax breaks have long been one of the biggest ways La Liga has continuously attracted stars. This could cause serious damage to the quality of Spanish football.

    They might as well just hand all of league's best foreigners to the Premiershit.
    Last edited by La Furia; 5th November 2009 at 01:30 PM.

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    Just focus on fixing the damn scheduling and TV issues, make La Liga more accessible and then you'll make some money.

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    I read this earlier today. My first thought was 'poor Ibra'.. then I remembered he makes more in a day than alot of people make in a year and my second thought was 'fuck Ibra'..

    Anyway, I was honestly very interested in the outcome of this. They've been talking about proposing higher tax on foreign players for a while, and the first to be affected will easily be the clubs. If they want to hang onto the foreign talent, they need to pony up the increase in tax difference.

    I can see the merit of the idea, but the fact that it has a quick-implementation policy, and that it will only affect new contracts will cause some issues IMO. I'm very interested in seeing how it plays out.
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    Foreign millionaires on strike - the public support will be deafening! It's a typically popularist move to strike at the pockets of the rich from a socialist government desperate to gain some popularity at a time when its reputation is in tatters. In terms of tax revenue the removal of the main reason to come and play in Spain (for many players) will probably mean that in net terms the government loses out as players suddenly look at playing elsewhere or aren't attracted to La Liga in the first place. Beef is right though that the league could do a lot to help themselves rather than pointing figures at a government decision that is yet to be confirmed.
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    Quote Originally Posted by Cule Angles View Post
    Foreign millionaires on strike - the public support will be deafening! It's a typically popularist move to strike at the pockets of the rich from a socialist government desperate to gain some popularity at a time when its reputation is in tatters. In terms of tax revenue the removal of the main reason to come and play in Spain (for many players) will probably mean that in net terms the government loses out as players suddenly look at playing elsewhere or aren't attracted to La Liga in the first place. Beef is right though that the league could do a lot to help themselves rather than pointing figures at a government decision that is yet to be confirmed.
    Well the league's constant mismanagement does not have my sympathy, but the timing for this is god awful and it could single handedly turn La Liga into a second tier league outside of the obvious 2.

  11. #11
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    Quote Originally Posted by Cule Angles View Post
    Foreign millionaires on strike - the public support will be deafening! It's a typically popularist move to strike at the pockets of the rich from a socialist government desperate to gain some popularity at a time when its reputation is in tatters. In terms of tax revenue the removal of the main reason to come and play in Spain (for many players) will probably mean that in net terms the government loses out as players suddenly look at playing elsewhere or aren't attracted to La Liga in the first place. Beef is right though that the league could do a lot to help themselves rather than pointing figures at a government decision that is yet to be confirmed.
    Not correct actually. Oddly, Antena 3 news poled the public of wether clubs should go on strike over the issue of taxation. 88% were in favour of the clubs, I can't believe the Spanish sometimes, how can they be happy, infact even angry at the prospect of making wealthy players pay a fair proportion.

  12. #12
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    When Antena 3 conduct a poll it means they've walked out of their madrid office and asked two old men on a bench opposite what they think.
    Quote Originally Posted by Joan Laporta
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    Maybe they should start by actually trying to force rich Spaniards to pay up, I mean really, how many club owners have been convicted of tax fraud at some point in their life?

  14. #14
    Super Pippo
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    So 76% of one of those men is in favour of the clubs? Curious.

  15. #15
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    Quote Originally Posted by Super Pippo View Post
    So 76% of one of those men is in favour of the clubs? Curious.
    Maybe they had a few mates with them today
    Quote Originally Posted by Joan Laporta
    Barça make Ballon d'Or winners, others have to buy them
    VICE-PRESIDENT OF THE UK'S BEST OFFICIAL SUPPORTERS' CLUB
    www.penyaunionblaugrana.co.uk