The National Court confirmed this Friday the resolution of the Central Economic Administrative Court (TEAC), attached to the Ministry of Finance, which imposed on FC Barcelona the payment of almost 23 million euros for personal income tax for the years between 2012 and 2015 derived from the remunerations paid to the players' sports agents.
In the ruling, the Fourth Contentious-Administrative Section rejects the appeal presented by the Blaugrana club against the TEAC resolution of June 2020, which in turn derived from the 2018 agreements of the technical office of the Central Delegation of Large Taxpayers (DCGC) for which the liquidation and sanctioning resolutions were carried out for the concept of withholding/payment on account income from work/professional personal income tax of the periods between January 2012 and June 2015.
The amount derived from the total tax settlement was 8,764,118 euros while, as a penalty, the payment of 3,031,893 euros (2012), 4,348,402 euros (2013), 5,172,955 euros (2014) was imposed. ) and 1,414,158 euros (2015). As the resolution of the National Court explains, the underlying issue is the nature of the services provided by the players' agents.
The Administration, on the one hand, maintains that the remuneration paid by the club to the agents is in the nature of work income and is subject to withholding at the time of payment, so it is obliged to make and deposit the corresponding withholding. And this is because they understand that they provide their services to the footballers and not to the club, in accordance with the provisions of the Player Agent Regulations.
On the other hand, FC Barcelona understands that the amounts paid to the agents hired by the club correspond to the remuneration agreed for their services provided to the sports entity and, in this sense, it is not possible to attribute as remuneration to the players the amounts corresponding to provision of services to the club.
The court understands that “what underlies these matters is that it is not proven that there has been dual intermediation, as claimed by the plaintiff (the club), agreed as such by all the parties involved, and that the payment has not been made in the name of the player”.
“Payments to players”
Once the issues raised by the parties have been examined, the National Court says that it is abundantly clear, from the reading of the TEAC Resolution, that there was simulation. “From the facts verified by the inspection, it appears that the payments made by the club have been in the name and on behalf of the athletes who are the actual recipients of the services provided by the agents, while it appears that the agents are providing a service commissioned by the club or representing the club,” he emphasizes.
And he goes on to indicate that this supposed service “is not accredited in any way” and that the reality reflected in the documents in the file “is contrary to these circumstances, since the agents represent the players and act in their interest.” “The Inspection reaches the conclusion that the relationship implemented between FC Barcelona and the agents only serves to cover the payments made by the club to the players. This appreciation is shared by the Chamber,” he concludes.
Furthermore, the court explains that in tax simulation it is necessary to use devices aimed at tax avoidance, that is, to enjoy tax advantages that do not correspond to the actual operation carried out. “It is a matter, he adds, of obtaining a more favorable tax treatment of the taxable event and its concurrent circumstances than would correspond to the actual operation,” he explains.
And he points out that in the present case “it appears that the club is remunerating the agent for non-existent services, when in reality part of the remuneration is being paid to the player in this way, for the services he provides to the club, with the corresponding tax incidence.” , which affects Corporate Tax, VAT and Personal Income Tax, distorting the tax base of such tax concepts.”
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