2023-10-22 13:16:30
An “unacceptable tax gift” for the opposition; an “important element of attractiveness” for the government. An amendment to the finance bill for 2024, tabled by the deputies of the presidential majority and retained by the government, creates a particularly advantageous tax framework for international sports federations, as noted by Les Echos.
It aims to “promote the installation and maintenance on French territory” of these bodies “by guaranteeing them an adapted and sustainable tax framework for their activities of sports governance and promotion of sports practice, which are carried out outside the field competitive or commercial.
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Concretely, the system offers an exemption from corporate tax, the property tax of companies and the contribution on the added value of companies, as well as an exemption from tax on the income of employees of these federations domiciled in France during five years after their “first taking office”.
A favorable tax regime in Switzerland
In order to encourage international federations recognized by the International Olympic Committee (IOC) to come to France, the majority is therefore considering a tax haven regime. There are currently 34 international federations recognized by the IOC. Most of them are headquartered in Switzerland, where they benefit from a favorable tax rate of 4.25%.
This very favorable regime allowed Fifa, whose headquarters is located in Zurich, to pay only $23 million in taxes in 2022 on a net profit of $2.4 billion, notes Les Echos.
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As noted The crossa study by the International Academy of Sports Sciences and Technology estimated the economic impact of international sports federations in Switzerland at 1.68 billion Swiss francs (1.77 billion euros) in 2019, notably thanks to more than 3 000 direct jobs or 45,000 business nights.
“Potential economic benefits”
The government has not confirmed that this amendment aimed to attract Fifa more to France, while the Elysée dreams of seeing the governing body of world football move its headquarters from Zurich to Paris.
Contacted by AFP, the Ministry of Sports argues that “this provision aims to extend to international sports federations […] a regime already applied in France to international organizations” and that it only concerns “non-commercial activities”. “This is an important element of attractiveness, a source of potential economic benefits for France, in a context where we are preparing to host more than 30 major international sporting events in the coming years,” adds the ministry.
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But, according to an internal source at Fifa contacted by AFP, the “objective” sought is indeed “Fifa”. The body already has a branch in Paris, since June 2021: an annex at the Hôtel de la Marine, Place de la Concorde. This is responsible for relations with the federations and technical cooperation in favor of the development of football. It also houses a clearing house responsible in particular for solidarity mechanisms.
“The objective is to bring in international federations, not just Fifa,” says in West France Renaissance MP Mathieu Lefèvre, one of the signatories of the amendment. Fifa was created in Paris in 1904, before moving in 1932 to Zurich, which became its main headquarters in 2007. Last September, the body planned to move more than a hundred staff positions from its headquarters from Zurich to Miami, Florida, a source with knowledge of the matter told AFP.
Fifa “does not need to evade taxes”
As Les Echos recalls, informal discussions took place on several occasions between Emmanuel Macron and Gianni Infantino regarding the question of moving the headquarters to France. The boss of Fifa is pushing internally for a move to symbolically close the chapter of repeated financial scandals which have tarnished the image of the organization, recalls the economic daily. Contacted by Ouest-France, Fifa however denies having the intention of leaving Zurich.
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This amendment does not pass to the opposition side. “Fifa has substantial resources. It has no need to avoid taxes,” deplores environmentalist MP Jean-Claude Raux, criticizing “the tax gift too many”. The National Rally protested in a press release against “an unacceptable tax gift” which “contrasts with the intransigence and contempt of Macronie” on “social emergency measures”.
A non-profit association, Fifa posts a record turnover of 7.6 billion dollars (6.7 billion euros) at the end of the 2019-2022 commercial cycle, reminds Le Monde. For the 2023-2026 cycle, it expects revenues, excluding the Club World Cup, of $11 billion. Fifa also has financial reserves of nearly $4 billion.
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