how European countries play with taxation to attract the best players

Foreigners often benefit from tax deductions in the countries where they play. An advantage to attract the best players but which is not fundamental to explain the competition between the championships.

Did Paris Saint-Germain benefit from a tax favor from the government? Searches were carried out on Monday January 18 at the Ministry of Economy and Finance as part of an investigation into the most expensive transfer in history, that of Brazilian striker Neymar from FC Barcelona to the capital club .

With high incomes in the world of football, the question of taxes is sensitive. And not all European clubs are in the same boat. Differences sometimes exist within the same championship. In Ligue 1, the AS Monaco club benefits from the tax advantages linked to the principality. The club pays 25 million euros per year to the Professional Football League (LFP) to be able to keep its head office in Monaco and keep taxes low. Another advantage of the Monegasque club is the absence of income taxes for foreigners, which makes it easier to attract these internationals.

An advantageous impatriation system in France

For foreign players, numerous tax deductions exist in all European countries. They do not only concern the sporting world. In France, the impatriation system also benefits high incomes in large companies, underlines the newspaper The Team. It allows you to benefit from a tax deduction of 30% on your net remuneration.

The system does not only benefit foreign players but all those who have been tax residents in another country for five years. Players French, returning from a long exile in foreign clubs can therefore benefit from it. Note that certain clubs, notably PSG, pay their players’ taxes directly.

A tax advantage resembling the French system of impatriation also existed in Italy. This system, called “decreto crescita” (the growth decree), allowed foreign players to declare only 50% of their income. But it was abolished on January 1 by the government of Giorgia Meloni. The Spanish system, which allows foreigners settling in the country to have a favorable tax regime, is nicknamed “Beckham law”, after the English footballer who was one of the first beneficiaries in 2005 after its signature at Real Madrid.

A disadvantageous French system?

In this competition between the major championships, at the fiscal level “the French system disadvantages the clubs” of France, explains sports economist Luc Arrondel. A situation which can be explained in particular because “employer social contributions, which are significantly higher in France than in European countries”.

In his book Football money – Volume 1 Europethe researcher at the CNRS-Paris School of Economics calculated with Richard Duhautois the overall cost for a gross salary of 100,000 euros and 1 million euros in the main European championships, that is to say in France, in the Kingdom -United Kingdom, Spain, Germany and Italy.

If income tax is ultimately the lowest in France compared to other countries, employee and employer contributions are the highest. For a player playing in France, the amount of taxes and contributions is not that far from another country like Spain. On the other hand, the cost for the club is much greater in France.

“It’s not just a tax problem”

But this difference in taxes is not essential to explain the competition between the championships. “What really matters is the turnover of the leaguesrecalls the researcher. When you have the Premier League in England, which has signed over 6 billion euros in overall turnover, while Germany and Spain are around 3 billion and Italy just over 2 billion. It’s not just a tax issue.”

Budgets mainly linked to TV rights. In France, the recent failure of the auctions for rights from 2024 to 2029 has pushed the Professional Football League to negotiate with each operator and will certainly have to abandon its objective of obtaining one billion per season.