Spanish tax authorities clamp down on the world of football

The Spanish tax authority (Hacienda) have discovered that money is being hidden from them in the world of football and are reacting accordingly. Their first focus was on Spanish football club's who, in recent times have managed to get their affairs into line thanks to pressure from Miguel Cardenal and head of LaLiga, Javier Tebas. In just a few years, 560 million euro of a total and ever increasing debt of 750 million was paid back. The remainder of the debt has been agreed in installments from the implicated clubs to the inland revenue with a cut-off point of 2020 for the conclusion of the repayment scheme. There is still plenty of work for the clubs to do as the culture of "looking the other way" when it came to tax payment is deep rooted. Over a century ago (before the game turned professional) key players were "paid" in a form of expenses.

Image rights tax

The tax evasion cases concerning players is something new in the line of investigation by the tax office and Hacienda have unearthed three strains in their line of probing. A law was passed over ten years ago forcing players to pay a 15% tax on income generated from image rights and players have been compelled by the tax-man to generate private companies to oversee this activity. If the player fails to comply (as is the case in general with many players) then the player in question has to pay the sum via a PAYE system which is often backdated. This system has caused much furore among players and has led to many legal cases been taken up by individual footballers.

Off-shore

The world of football agents is also under close scrutiny with common practice being a process seeing football club's paying agents instead of the cut coming from the player's wage packet. The final area of scrutiny involves off-shore bank accounts in tax havens which is often used to hide large sums of money away from the eye of the Spanish tax system. Once again, here the authorities are discovering that this practice is widely commonplace with many players sharing the same agent and adopting the same off-shore practice. Time will tell just how much money is recovered by Hacienda in these investigations but the business of football has been adept in the past at doing it's utmost to avoid paying their dues to the tax authority.