Seven Spanish football clubs, including Real Madrid and FC Barcelona, must return tens of millions of euros to the Spanish government for illegal tax breaks, the European Commission (EC) said. The EU antitrust authority viewed the tax breaks they received, loans and bank guarantees and their real estate deals as an unfair advantage over their competitors.
“Professional football is a commercial activity that involves a lot of money, and budget funds must comply with the rules of fair competition. But this is not the case with the subsidies we studied, ”said European Competition Commissioner Margrethe Vestager.
Spain’s finance ministry and clubs Real Madrid and Osasuna declined to comment. Athletic clubs Bilbao, Elche, Valencia, Hercules and the authorities of Madrid and the province of Valencia did not respond to the request. A spokesman for FC Barcelona also declined to comment, but said the club will hold a press conference this afternoon.
Real Madrid, FC Barcelona, Athletic Bilbao and Osasuna have to pay the Spanish government about 5 million euros each, because they paid income tax at a reduced rate of 25% instead of 30%. Clubs are considered non-profit organizations. But the EC said they have benefited from it “without objective justification” for more than 20 years. In this case, the exact amount of payments will have to be determined by the Spanish authorities.
Real Madrid will also need to return 18.4 million euros to the capital’s authorities for the exchange of land plots. The club’s former training base, now located in the city’s financial district, has been home to the three tallest skyscrapers in Madrid. Real Madrid received a larger piece of land further from the city center in return. In 1998 this land was valued at 595,000 euros, but in 2011 it was revalued at 22.7 million euros.
In addition, the EC ordered that Valencia, Elche and Hercules return 20.4 million euros, 3.7 million euros and 6.1 million euros, respectively, to the authorities of Valencia. This is because they have benefited from bank guarantees and loans they received on better terms than other clubs.
The EC began three official investigations against these seven clubs back in December 2013. In addition, the EC closed investigations against five clubs from the Netherlands, including PSV Eindhoven, without finding evidence of violations. The regulator suspected them of receiving illegal assistance from local authorities, including those related to land purchase transactions.
According to Deloitte, Real Madrid and FC Barcelona are the richest football clubs in the world with combined revenues of around € 1.1 billion in the 2014-15 season.
Translated by Alexey Nevelsky
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