July 10 – The highest court in France has quashed an agreement between Monaco and the French football league (FFF) that has been giving the principality club special tax status.
Monaco have been playing in the French league for nearly a century and have been champions seven times but were outraged when the league voted to kick them out unless they relocated their headquarters across the border to France. As a compromise, they agreed to pay €50 million to stay in their tax haven and thus avoid paying the 75% tax rate on individual annual incomes in France that exceed €1 million.
But after complaints from rival clubs, including big guns Marseille and Paris St-Germain, France’s Conseil d’Etat has outlawed the accord to allow Monaco to compete without losing its fiscal base.
“The Conseil d’Etat rules irregular and illicit the deal in which the French Professional Football League (LFP) modified its rulebook in January 2014 to allow AS Monaco keep playing in the League 1 and 2 championships without being obliged to base its headquarters on French territory,” a court statement said.
The court said it would allow the two sides four months to resolve the issue so as not to disrupt next season’s competitions, with the ruling taking effect in October.
Monaco’s exemption from the tax status other clubs have to adhere to has allowed it to attract players who can take home their full salaries. This has led to festering resentment among rivals who argue Monaco have an unfair advantage and a privileged position.
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