“8 Soccer Players At The World Cup Who Have Been Caught Up In Tax Scandals” (Forbes) is World Cup news that Americans can understand.
One interesting angle is that value-added tax can be collected on a human:
In 2014, Spanish tax authorities set their sites on another soccer transaction: Luis’ move from Deportivo La Coruña to Atletico. The transaction was subject to value-added tax (VAT)
Buried at the very end is an explanation for why the litigation is so often with the Spanish government:
Years ago, the so-called “Beckham Rule” was made law in Spain to allegedly benefit England’s David Beckham, who moved to Spain to play for Real Madrid. Under prior Spanish law, you could elect to be taxed as a nonresident if you lived and worked in Spain, if you met certain criteria. The law was short-lived and wrapped in 2010 (perhaps, not coincidentally, after Beckham left Spain). Most of the recent allegations aimed at soccer players have their beginnings in 2011 and after.
I wonder if any of this is reasonable. Consider the Brazilian who plays soccer in London on behalf of a team in Spain… why does he or she pay income tax only to Spain? In the U.S., for example, professional sports team players have their income apportioned to the states where games were actually paid (See Why isn’t the Super Bowl always in a tax-free state?). Maybe they also do that in Europe, but these licensing deals and then taxed only in the country of official residence? But the licensing deals wouldn’t exist without the games being played.
European readers: Can you try to explain to us Americans why the World Cup is worth watching?
- “Taxation and International Mobility of Superstars: Evidence from the European Football Market” (December 2009 draft from London School of Economics and UC Berkeley, Klevin, Landais, and Saez): “the level of top earnings tax rates has a large and significant impact on the migration decisions of football players. … The large tax induced migration effects we uncover translate into significant effects in the performance of football clubs across countries.” (i.e., when you watch the World Cup you are actually seeing competition among tax codes)