The evolution of FIFA regulations has significantly influenced these interpretations, opening the door to accepting dual representation and partial deductibility of commissions.
It is crucial to stay informed about future judicial pronouncements and the inspectorate’s stance to navigate this ever-changing tax landscape effectively.
Today’s session will focus on the tax treatment in Spain of commissions paid to football agents. We will explore how the tax inspectorate has handled these commissions, the evolution of FIFA regulations that influence these decisions, and the opinions of the courts in recent years.
The Spanish tax inspectorate has been evaluating the commissions paid to football agents, interpreting these transactions in light of FIFA regulations. The operational procedures followed by the inspectorate have varied depending on the fiscal year being inspected, leading to a series of relevant judicial pronouncements.
The inspectorate considers that the commissions paid to agents are not deductible in the player’s IRPF, interpreting these payments as an additional salary for the player. This has two main effects:
The inspectorate’s reports have been appealed, leading to various judicial pronouncements. The rulings can be broadly categorized into two main types:
Some rulings have favored the appeals filed by clubs and players on procedural grounds. These rulings consider that the tax administration has exceeded the limits of the qualification figure under Article 13 of the General Tax Law.
Other rulings have dismissed the appeals filed by clubs and players on evidentiary grounds. These rulings side with the administration, considering that dual representation or the agent’s representation of the club has not been proven.
The evolution of FIFA regulations has significantly influenced the inspectorate’s and the courts’ interpretations:
This regulation prohibited dual representation, meaning an agent could not represent both the player and the club in the same transaction. Pre-2015 rulings are based on this regulation, considering dual representation contracts as simulated and concealing a fraudulent purpose.
From 2015 onwards, dual intermediation is permitted, provided it is documented and conflicts of interest are avoided. The courts have opened the door to accepting the deductibility of 50% of the commissions in cases of dual representation.
The new regulation, effective from 1 October 2023, imposes a limitation on dual representation, stipulating that the club can pay a maximum of 50% of the agent’s fees. This could be interpreted as a service provision to both the club and the player, allowing for the deductibility of VAT and avoiding withholding as additional salary for the player.
In summary, the tax treatment of commissions paid to football agents in Spain is complex and continually evolving. The tax inspectorate has been regularizing these commissions, interpreting them as additional salary for the player. The courts have issued varied rulings, some favoring clubs and players on procedural grounds, and others siding with the administration on evidentiary grounds.
The evolution of FIFA regulations has significantly influenced these interpretations, opening the door to accepting dual representation and partial deductibility of commissions. It is crucial to stay informed about future judicial pronouncements and the inspectorate’s stance to navigate this ever-changing tax landscape effectively.
