Spanish football clubs found in breach of state aid rules

by Matthew Campelli | 05 Jul 2016

A number of football clubs in Spain – including Barcelona and Real Madrid – will have to pay back millions of euros to their respective governments after breaking state aid rules.

Following “in-depth” investigations, the European Commission found that clubs had accumulated millions in government subsidies and paid less than the required amount of tax over a number of years.

As a result, both countries have been told to recover the funds from the football clubs, which also include Athletic Bilbao, Valencia, Atletico Osasuna, Elche and Hercules in Spain.

The Commission found that Real Madrid, Barcelona, Athletic Bilbao and Osasuna have been allowed to enjoy preferential corporate tax rates of 25 per cent rather than the 30 per cent applicable to sport limited companies since 1990. The shortfall will need to be paid back to the Spanish authorities by each club.

A land transfer transaction between Real Madrid and the City of Madrid was also scrutinised, which found that the land was overvalued by €18.4m (£15.6m, US$20.5m), giving the football club an “unjustified advantage over other clubs”. The money now needs to be paid back.

In addition, the Commission investigated guarantees given by the state-owned Valencia Institute of Finance for the loans of three football clubs – Valencia, Hercules and Elche. The Commission has concluded that the loans were provided on “more favourable terms” and unfair to non-subsided clubs. Valencia, Hercules and Elche will have to pay back €20.4m (£17.3m, US$22.7m), €6.1m (£5.2m, US$6.8m) and €3.7m (£3.1m, US$4.1m) respectively.

“Using taxpayers’ money to finance professional football clubs can create unfair competition,” said competition policy commissioner Margrethe Vestager.

“Professional football is a commercial activity with significant money involved and public money must comply with fair competition rules. The subsidies we investigated in these cases did not.”

Barcelona  Real Madrid  Valencia  spain  football  European Commission 
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A number of football clubs in Spain – including Barcelona and Real Madrid – will have to pay back millions of euros to their respective governments after breaking state aid rules. Following “in-depth” investigations, the European Commission found that clubs had accumulated millions in government subsidies and paid less than the required amount of tax over a number of years. As a result, both countries have been told to recover
SAR
Real Madrid – which plays at the Santiago Bernabeu – was one of the clubs implicated in the cases / Yuri Turkov/Shutterstock.com
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