Liga Santander: The tax gap that attracts stars to Italy and England and worries LaLiga | LaLiga Santander 2020

A report estimates that their 'cracks' can pay 60% more with the same salary than a rival of the Premier or Series A

 Cristiano, in a Juventus match last season.

Cristiano, in a Juventus game last season.

The gap between the taxes paid by the great soccer stars in Spain with respect to Italy and the Kingdom United worries LaLiga, which calculates that its 'cracks' may pay 60% more with the same salary than a rival in the Premier or Serie A, according to a report commissioned by the employer.

differences in the taxation of the salary they receive from their clubs and income from image rights, and tax changes in countries such as Italy, which have improved the conditions for those who pay taxes on international income – for example, the large advertising contracts of stars – have been underlined by the president of the employer, Javier Tebas on several occasions.

"In the field of football we are taxed the worst country in the EU . In England, France and Italy there is a tra improved income for athletes and that causes a flight of talent to these countries, "he said in June during a business summit of the Spanish Confederation of Business Organizations (CEOE).

To verify these differences, LaLiga se has raised, in an internal document to which EFE has had access, the assumption of a player with a world star salary (25 million euros net per year), five years of contract and that he receives 50 million per year for image rights, 40 of them from abroad.

That player, according to the calculations made by the employer based on a comparative study prepared by the law firm Garrigues would pay with the same earnings a tax of 215.1 million in Spain (106.3 million for his salary and 108.8 for image rights), compared to the 130.4 million that he would pay to the Italian treasury (107.7 for salary and 22.7 for image) or the 120.7 to the hacienda of United Kingdom (98.7 for salary and 22 for image). A difference borne by the clubs, which agree with the stars net salaries, which makes them less competitive.

Beckham Law

The reasons for the difference go through the tax regimes applied by these countries : Italy passed legislation in 2017 aimed at attracting large wealth that allows a player to pay a fixed amount of 100,000 euros on his income from abroad, and may even apply this regime to his relatives.

"They have copied Spanish 'Beckham Law', establishing conditions that make many players go to play there ", explains to EFE the expert in Tax Law Félix Plaza, partner in the Tax Law department and head of the Sports Law department in the Garrigues office.

On the other hand, in the United Kingdom they have two advantages, the 'split year rule' rule that allows taxation only from the month they arrive in the country (something common in jug adores signed in July), and the possibility that non-residents only pay tax on income generated in the country, so that they do not have to pay image rights abroad or for earnings with their selection as long as they do not transfer that money to the United Kingdom.

"For this reason, the big stars that have exploitation of image rights abroad have this income exempt in the United Kingdom", points out the expert.

What is the situation in Spain? From 2005 to 2010, the special scheme for displaced workers – popularly known as' Beckham Law because its approval coincided with the arrival of the English footballer to Real Madrid-, allowed foreign footballers to pay 24% for the first 600,000 euros instead of the 43%, but in 2010 the players were excluded from this regime.

Regarding the image rights in the 90s it was regulated that footballers could declare part of their earnings to through a company without exceeding 15% of its emoluments, but in recent years it has begun to be considered that these transfers of image rights should be made at market prices. "This means that in the end there is no special regime, because all that has to be taxed in income," says Félix Plaza.

"Generate more income"

The expert from the Garrigues law firm considers that, to continue attracting foreign 'cracks', the authorities should consider two measures: tax image rights as savings income, to avoid the problems that companies generate, and return to a regime similar to the' Beckham Law ', which would facilitate the arrival of international stars.

How do you explain to the public opinion of a country that a worker, the soccer player, who earns millions of euros is going to pay an average rate of 24% while another that earns less but exceeds 60,000 euros per year can pay an average rate of 45%?

"This issue must be viewed from the point of view of generating more direct or indirect income in Spain as a result of come the best players. That is, selling my audiovisual rights for 2,500 million instead of 1,800, having more expensive sponsorships. All that interests me, because the clubs and LaLiga pay taxes for that, more spending is generated, more jobs. Above all, you increase the value of the clubs and LaLiga, "says the tax expert.

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