A ruling forces FC Barcelona to pay 23 million euros for salaries to agents between 2012 and 2015

FC Barcelona is required to pay the Treasury 23 million euros in personal income tax for remuneration to sports agents between 2012 and 2015. The National Court has upheld the Central Economic Administrative Court’s decision and rejected the appeal made by the club’s chairman, Joan Laporta.

According to the Fourth Section of the court, the club failed to make a timely tax settlement amounting to 8.7 million euros, and it also imposed fines of 3 million euros for 2012, 4 million euros for 2013, 5 million euros for 2014, and nearly one million euros for 2015, which was the final year of the contingency period.

The Court states that payments made to player representatives are considered income from work, as per the Player Agent Regulations, because the services are provided to the players and not the club. Therefore, the payments are subject to withholding tax at the time of payment. However, Barcelona argues that these payments benefit the club and should not be classified as income from work.

Tax misrepresentation

The court refers to the tax “misrepresentation” carried out by the club. The court’s ruling states, “The Inspection concludes that the relationship between FCB and the agents is merely a cover for the payments made by the club to the players. The Chamber shares this assessment.”

In essence, the Tax Agency believes that the tax obligations arising from these payments are based on a contractual relationship that is different from what the parties have stated as the reason for the provision of services.

According to the Chamber, Barcelona used deceptive practices to obtain tax advantages that are not aligned with the actual operation conducted. It seems that the club was compensating the agent for non-existent services, when in fact, part of the remuneration was being paid to the player for the services rendered to the club.

Cassation appeal

Barcelona has announced its intention to file an appeal with the Supreme Court within the 30-day timeframe. The club will try to justify the discrepancies in tax perceptions between them and the Tax Agency.

Barcelona is surprised that the National Court’s Fourth Chamber did not consider the recent jurisprudence of the High Court, which has benefited other football clubs. They also highlight that the same court upheld an appeal a few months ago that arose from the same inspection.

The ruling by the National Court does not impose an immediate payment obligation, as the final decision will be made by the Supreme Court. However, the club assures that “this contingency has been adequately provisioned in the annual accounts.”