Florentino Perez (right) and Josep Maria Bartomeu, in the stands at Camp Nou.
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LLUIS GENE / AFP
The tax regime enjoyed by FC Barcelona, Real Madrid and two other Spanish football clubs for 25 years does indeed constitute illegal aid from the Spanish state, European justice ruled on Thursday, definitively rejecting an appeal from Barça.
In 2019, at first instance, the General Court of the European Union annulled a decision taken in 2016 by the European Commission denouncing an undue tax advantage and demanding reimbursements.
But the Court of Justice of the EU, based in Luxembourg, took the opposite view of the General Court on Thursday and validated the merits of the Commission's decision.
"The Court, upholding the conclusions of the appeal brought by the Commission, sets aside the judgment (of the General Court) under appeal," she said in a press release.
The CJEU points out in particular “an error of law” of the General Court concerning the complex system of State aid and the limits to be set.
It also considers that the Commission was right to criticize Spain for the lack of notification of the special tax regime enjoyed by the four clubs: Barça, Real, Athletic Bilbao and Osasuna (Pamplona).
In 1990, a Spanish law had forced professional sports clubs to transform into sporting limited companies (SA), recalls the Court of Justice.
“An illegal aid regime” according to the EU
But four clubs had preferred to assert an exception to the law allowing them to continue to operate as "non-profit legal persons", in order to benefit from "a specific rate of taxation of their income".
As this specific rate turned out until 2016 to be lower than that applicable to public limited companies, the Commission decided that year to turn to Spain.
It had informed this Member State that the regulations allowing this tax advantage constituted "an illegal aid scheme incompatible" with European rules and had ordered it to recover the money from the beneficiary clubs.
Barça then brought the case to EU justice.
In 2019, the president of the Spanish Supreme Sports Council (CSD), Miguel Cardenal, estimated the financial impact of the Brussels decision on the four teams at 1.6 million euros, for the last four fiscal years alone.
He had called it "ridiculous sums in view of the football economy".
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