March 5 – Barcelona, Real Madrid and two other Spanish clubs have been dealt a significant financial blow after being forced to pay back millions of euros in illegal state aid following a ruling by the EU’s highest court.
The European Commission in a 2016 ruling said that Barcelona, Real Madrid, Athletic Bilbao and Osasuna enjoyed a 25% tax rate for more than 20 years, giving them an unfair advantage under a Spanish law dating back decades.
The four clubs enjoyed the lower tax rate because they were treated as non-profit organisations instead of professional football clubs with limited liability. But now they have been ordered to pay up to €5 million each in back taxes.
Barcelona, already in dire financial straits, challenged the original EU decision arguing that there was no legal proof of an economic advantage.
But the European Court of Justice sided with the commission in finding that the conditions met the state aid definition under European law.
“The aid scheme at issue was, from the time of its adoption, liable to favour clubs operating as non-profit entities over clubs operating in the form of public limited sports companies, thereby conferring on them an advantage capable of falling within the scope of Article 107(1) TFEU,” the court said, referring to EU state aid rules.
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