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Barcelona, ​​Real Madrid sting ahead with multimillion tax avoidance bill in financial hit

Barcelona and Real Madrid have been dealt another financial blow with rivals Clásico, stating they will be stranded with a € 5 million (£ 4 million / $ 6 million) bill as part of the European Union fight . Against avoidance of tax.

The Athletic Club and Osuna have also been informed that they will have to return to pay.

The clubs under consideration, led by Barca, challenged an early decision questioning the use of a 25 percent tax rate instead of the standard 30 percent rate for sports companies, but the final result has not come in their favor.

What has been said

The Luxembourg-based Court of Justice of the European Union (CJEU) stated in its report: “The aid scheme on this issue, from the time of its adoption, has been on the operation of clubs to friendly clubs acting as nonprofits Was liable. As public limited sports companies, giving them an advantage which is able to come under the purview of Article 107 (1) TFEU. “

Why were Barcelona and Real Madrid paying less tax?

Leading parties in Spain had enjoyed lower tax rates than the number of rivals for more than 20 years as they were regarded as non-profit organizations rather than professional football clubs with limited liability.

Who challenged them?

The European Commission ruled in 2016 that the four teams under consideration were given an unfair advantage by occupying a lower tax bracket than other sporting institutions.

Barcelona appealed against that and got the General Court to wipe it out in 2019 on the grounds that the EU competition watchdog was not able to prove the required legal standard that any benefit was enjoyed.

The Commission subsequently took its case to the CJEU to prove that Barca, Real and Company had taken economic advantage.

Big picture

It has surfaced in 2021 Barcelona is reeling under the weight of total debt of € 1.2 billion (£ 1.1 billion / $ 1.5 billion).

Real and many other parties around the world have also been hit hard by the financial impact of the ongoing coronovirus epidemic.

However, the hope is that supporters will soon be freed to return to the stadiums and help carry the coffer of even the most iconic sporting superpowers.

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