Soccer’s popularity has long protected the clubs, said Pablo Alarcon, a tax attorney in Madrid who teaches at IE Law School. “Every government knows it needs to have football supporting them,” he said. “It’s like the old Roman times, with bread and circuses. Give the people circuses and you can handle them.”
The government’s tolerance of the tax delinquency is a disgrace, said Ada Colau, a Barcelona-based spokeswoman for Platform for Mortgage Victims, a lobbying group that aims to defend families at risk of having their homes repossessed.
“These clubs are often controlled by businessmen who move among the social elite and get privileges that normal people don’t,” she said. “They have contacts in high places.”
Patience Wanes
As it struggles to escape a six-year slump and 26 percent unemployment, Spain’s patience has worn thin. One of the Spanish tax agency’s priorities is investigating the illegal use of tax strategies like image-rights companies by executives, artists and athletes, a spokesman said.
Last year, Spain set a deadline of 2020 for clubs to pay their back taxes. It has also tightened one of the biggest tax breaks for international soccer players, known as the Beckham Law, after one of its most high-profile beneficiaries. Adopted in 2005, the law was back dated to apply to players such as Beckham, who had transferred to Real Madrid from Manchester United in July 2003. Messi was already a resident of Spain, so he didn’t qualify.
Under the law, foreign employees of Spanish companies paid income tax at a rate of 25 percent for their first six years in the country, instead of the 52 to 56 percent now paid by the highest earners. They were not taxed at all on non-Spanish income.
Law Amended
At the end of 2009, Spain amended the law so it applied only to employees making less than 600,000 euros a year. After lobbying from soccer teams, players who arrived before 2010 remained covered under the old law, exempting some of the highest paid players in Spain.
Cristiano Ronaldo, a Portuguese forward for Real Madrid who signed a contract Sept. 15 worth 21 million euros a year according to the newspaper El Pais, is among those who qualified for the exemption.