Tax-Free Sporting Competitions or Lawful Tax Evasion?

This issue deserves special analysis and it is my intention to produce, in due course, a detailed and critical analysis of the fact that major sporting governing bodies enjoy tax-exemption in the countries that organise major sporting events, such as the Olympic Games and the World Cup. It would be extremely helpful if my readers were to produce, as always, their constructive comments on the several points I intend to raise.

As you all know, several administrative requirements need to be in place prior to the organisation of a major sporting event. FIFA, for example, has stringent selection criteria, regarding the countries who are awarded the hosting and staging of the World Cup. Amongst these administrative criteria, however, there is an additional important element which charactirises and determines the success of the winning bid: satisfaction of the demand for tax-free games for the world's governing body and its subsidiaries.

Such demand raises several legal and ethical questions. No doubt there are several advantages from hosting and staging a major sporting event, although it is questionable who gets to explore and enjoy such advantages. The main concern for the fans and consumers, under the present circumstances, is the application of equal treatment in terms of taxation. FIFA is a charitable organisation registered in Switzerland and it does not pay taxes to the Swiss government. FIFA also requires the same exception from the countries who are awarded the World Cup. One would, of course, speculate that if a country refuses to allow such exemption, it can, then, be assured that the World Cup would not be given to it. Although this is just a speculation, it does have a certain degree of force and persuasion.

Without going into great details, such exemption is non-negotiable and it incorporates all payments, revenues, expenses, costs, investments and other forms of financial credits, for FIFA and its subsidiaries. Such subsidiaries would of course include the hosting national federation as well as the organising committee of the World Cup. This is definitely a development that it is capable of making the HMRC very angry.

It would be beneficial if we were all to consider the benefits, if any, for the host country. But in doing so, we must also remember that all venues, in the country that organises the World Cup, come into existence because of the use of tax payers' money. In contrast, the majority of the revenue from the World Cup, goes back to Switzerland.

Those who care about equal treatment, would of course disagree with this unusual tax exemption. Those who care more about the image of the country, would go about their business without any further consideration as to the legal and moral repercussions. 

Dr. Gregory Ioannidis

6 June 2012


Popular posts from this blog

Preliminary (Provisional) & Conservatory Measures before the Court of Arbitration for Sport (CAS): Procedure & Practice.

An Insight into the World of Football Transfers

A Civil Action: Recipe for Disaster?