Οne Euroleague, different taxes

By Jose I. Huguet/ info@eurohoops.net

The economic power relations in European basketball are in constant change. Some years ago, the big Greek teams were the ones at the top, now Turkey and Russia are the ones getting the big names for their teams. Better money? Yes, but also, a better taxation that allow teams in equal budget conditions beat one another in the market.

We’re going to compare the taxes that must be paid for a ‘player-worker’ in different countries with Euroleague teams. In most cases, players negotiate a net income and teams must pay these players taxes to the state fiscal authorities (here is the link of the original article in “El Mundo Deportivo” website).

Spain: Different region, different tax

FC Barcelona is the Euroleague team where the players must pay higher income taxes because the rate for salaries up to 300.000 euros is 56%. Because of the fact that Spain has different fiscalities depending on the region, the four Spanish teams face different situations. The second that pays the most is Unicaja (55%) and third is Real Madrid (51,9%). A completely different scenario has Caja Laboral because of the special fiscal treatment in the Vasque Country.In this regio, the players are allowed to pay taxes only for half of their income. In Vitoria, where Caja Laboral is located, the higher rate for any people over 235.000 euros is 45%. Basketball players pay only 22,5%.

France: A big range of taxes

The higher income tax rate is 49% but only for salaries over 500.000 euros, an amount no player earns in France. Big part of the players are between 70.000 and 150.000 (41%) and there are two more rates (45% for salaries between 150.000-250.000 and 48% for salaries between 250.000-500.000). Teams respect carefully their fiscal obligations.

Italy: Under investigation

In Italy the higher income tax rate is 43%, although in the last years another 3% has been added for salaries up to 300.000 euros. That has been called ‘solidarity tax’. In Italy is very common to try to avoid paying all of the taxes you must and because of this reason Italian basketball federation and ‘Agencia delle Entrate’ (fiscal authority) have recently reached an agreement to cross information to control in a more effective way clubs and players.

Greece: You must avoid taxes

Historically there was a flat rate of 22% for any big income. But everything has changed with the arrival of the big crisis. Now salaries under 100.000 euros pay an income tax of 25% and the rate can grow up to 40% for better salaries. For this reason, many teams lie about their big players contracts, giving to the fiscal authorities numbers that are way below the real ones. In Greece you consider yourself stupid if you are a law respecting resident (Eurohoops ed. note: All teams are oblidged by law to published in the daily newspaper of their choice their yearly balance sheet and Olympiacos’ owners have accused publicly Panathinaikos’ owners for tax evasion).

Turkey: Special treatment

In Turkey the income tax rate for an individual is between 15 and 35% but sportsmen have an special fiscal treatment that depends on their level. So, players in the higher divisions on their sport must pay 15%, players of the second division  10% and players in lower divisions or from sports without league, 5%. Government is studying nowadays the possibility of removing these advantages and put the sportsmen at the same level of the rest of Turkish citizens.

Russia: Really cheap

In Russia the players’ taxation is different between Russian citizens and foreigners. Nationals must pay only 13% of their income and the rate for foreigners rise up to 30%. But this difference disappears if foreign players remain 6 months in Russia. Then the 30% rate changes to 13% and the government gives you back the 17% tax difference you paid before.

Serbia: Same as artists

In Serbia, sportsmen and artists have the same regulation. They must pay an income rate tax of 10,8%, no difference if you are national or foreigner. There is a curious situation with foreigners: team pays them a little bit more because just after getting monthly their money in Serbian dinars, they go to the bank to change it to dollars. This plus is a compensation for the money players may lose in the bank exchange.

Germany: The club pays

In contrast with most of the countries, in Germany the teams and not the players- are the ones paying their players income taxes that usually are 42% (for salaries between 53.000 and 250.000) or 45 % (salaries over 250.000). Besides, the team also takes care of the insurance fee medical coverage…There is no way to go round these taxes. The solution of paying part of a player’s salary as “image rights” via Switzerland, Hungary or any other country, which is used by clubs in some countries, is forbidden in Germany (Eurohoops ed. note: In many other European countries the taxes are also paid by the teams, despite the fact that the tax authorities are billing the players individually. There is usually a clause for that matter in their contracts).

Israel: American Paradise

There’s a tax agreement between US and Israel that say American entertainers don’t need to pay tax when they perform in Israel as long as they make up to $400/day. Basketball players are considered as “entertainers” so the ones who make up to 108,000 USD (9 months season) aren’t taxed at all. The ones who make more than that are taxed 25%. European players pay higher tax, around 35%. That’s why in teams outside Maccabi Tel Aviv there’s maybe only one European player in the league. It’s 98-100% American players there. Local ones pay 45% even though there are some additional taxes (health insurance for example) where locals pay much more than foreigners.

Croatia: Income tax and vat

Croatia has a peculiar system. Tax rate is 20%, but this amount should be increased with rate for retirement contribution and health insurance (6% approx). At the end, you must add VAT, that in Croatia is 25%. So, if a player gets 100.000 euros net in Croatia, the team must pay a total of 157.000 euros.