International Transfer of Football Players

ACKNOWLEDGMENTS
FÉLIX PLAZA ROMERO............................................................................ 21
PROLOGUE
JAVIER GÓMEZ MOLINA ......................................................................... 23
INTRODUCTION
FÉLIX PLAZA ROMERO............................................................................ 27
NOTE ......................................................................................................... 29
ACRONYMS / ABBREVIATIONS ........................................................ 31
ARGENTINA
EZEQUIEL LIPOVETZKY, MAXIMILIANO YUDICA AND LUCAS ROSSO 33
1. Introduction................................................................................... 33
2. General considerations on income tax...................................... 34
2.1. Argentine Tax Residents...................................................... 35
2.2. Foreign Beneficiaries............................................................ 37
2.3. Double Tax Treaty ................................................................ 37
3. Main income tax considerations applicable to football players and football clubs................................................................. 38
3.1. Federative and economic rights............................................ 38
3.2. Taxation on income obtained by football players (salary and their share on a transfer)...................................................... 38
4. Specific income tax considerations applicable to profits derived from the transfers of football players (domestic and international transfers)................................................................ 41
4.1. Income obtained by Argentine Entities (i.e., football clubs and other Argentine Entities) .............................................. 41
4.2. Income obtained by foreign transferors................................ 43
4.3. Application of DTTs to international transfer of football players.................................................................................. 44
5. Social security regime for Argentine footballers ................... 45
BRAZIL
ANDRÉ NOVASKI AND DORA PIMENTEL............................................. 47
1. Introduction................................................................................... 47
2. Brazilian tax residence rules applicable to football players 48
3. Income taxation at the level of the football players............... 51
3.1. General aspects..................................................................... 51
3.2. Football player considered a Brazilian tax resident ............. 53
3.3. Football player considered non-resident for tax purposes in Brazil.................................................................................... 56
3.4. Football players and taxation under Brazilian DTTs .......... 58
4. Exploitation of football players’ image rights......................... 61
5. Exit tax............................................................................................. 67
6. Taxation on transfers of players................................................. 68
7. Social security contribution regime .......................................... 73
CHINA
FRANK TAO............................................................................................... 75
1. Introduction................................................................................... 75
2. Rules for determining the status of tax residents in China.. 76
3. PIT rates for football players in China..................................... 77
3.1. Overview of PIT for football players.................................... 77
3.2. Application of income tax for transfer-related income......... 78
4. Chinese special tax policies for foreign football players...... 79
4.1. Introduction to special tax policies....................................... 79
4.2. Applicability and impact on transfer of foreign players ...... 80
5. Tax issues regarding football players’ image rights income 81
5.1. Tax treatment principles for image rights income................ 81
5.2. Tax risk points...................................................................... 82
5.3. Compliance key points.......................................................... 82
6. Tax issues regarding football players’ international transfer
fees and termination fees ............................................................ 83
7. Tax issues regarding social insurance....................................... 84
8. Conclusion and suggestions....................................................... 84
FRANCE
ROMAIN DAGUZAN AND BAPTISTE RICHARD................................... 87
1. Introduction................................................................................... 87
2. Tax residence rules........................................................................ 88
2.1. Internal tax residence rules.................................................. 88
2.2. Tax residence rules provided for by DTT ............................. 89
3. Income tax rates............................................................................. 91
3.1. Regular tax rates applicable on income in France ............... 91
3.2. Additional tax provisions on high income........................... 93
4. Special regime for employees moving to France (so-called
“impatriation regime”) ................................................................ 94
4.1. Exemptions on employment income..................................... 94
4.2. Exemptions on certain foreign-source income ..................... 95
4.3. Reference remuneration requirement................................... 95
5. Special tax regime for players and their image companies .. 96
5.1. General rules........................................................................ 96
5.2. Scope of article 155 A FTC................................................... 97
5.3. Application where the foreign company is in a non-privileged jurisdiction..................................................................... 98
5.4. Application where the foreign company is in a privileged jurisdiction ........................................................................... 98
5.5. Key points for football players.............................................. 99
6. Exit tax............................................................................................. 99
6.1. General principles ................................................................ 99
6.2. Application to professional football players ......................... 100
7. Termination and buy-out clauses .............................................. 101
7.1. General rules........................................................................ 101
7.2. Tax treatment of termination compensation ........................ 101
8. Taxation of international transfers of players ......................... 102
8.1. Sums paid directly to the player........................................... 102
8.2. Determining the period of French tax residence.................. 102
8.3. Tax implications for clubs - transfer fees.............................. 103
9. Social security contributions regime ........................................ 106
9.1. Employment income............................................................. 106
9.2. Investment income............................................................... 107
10. Other taxes (VAT, Wealth, Inheritance & Gift)........................ 108
10.1. VAT applicable to players..................................................... 108
10.2. Real Estate Wealth Tax......................................................... 108
10.3. Inheritance and Gift Tax ...................................................... 109
GERMANY
CARSTEN SCHLOTTER AND PHILIPP DIFFRING.................................. 111
1. Introduction................................................................................... 111
2. Standard tax year and filing obligations .................................. 113
3. Tax residence rules applicable to football players ................. 113
4. Church tax issues .......................................................................... 116
5. Football player considered resident in Germany................... 116
5.1. Typical income structure of a football player ....................... 116
5.2. Applicable tax rates.............................................................. 118
5.3. Special payments.................................................................. 119
5.4. Foreign matches.................................................................... 119
6. Payments to the player in a loan situation............................... 120
7. Payments at the end of an employment relationship............ 120
7.1. Outbound cases.................................................................... 121
7.2. Inbound cases....................................................................... 121
8. Tax-deductible income-related expenses ................................. 122
9. Special tax regime: inpatriate tax status and fringe benefits 123
9.1. No Special tax regime........................................................... 123
9.2. Tax-exempt fringe benefits ................................................... 123
9.3. Additional deductions and reliefs......................................... 124
9.4. Child benefits........................................................................ 124
10. Income from the national team.................................................. 125
11. Taxation principles for non-resident players ......................... 126
12. Image rights taxation/anti-abuse rules and structuring........ 127
13. Exit tax and extended limited tax liability............................... 129
13.1. Section 16(3a) EStG............................................................. 130
13.2. Section 6 AStG..................................................................... 130
13.3. Extended limited tax liability............................................... 131
14. Taxation principles of international transfers and loans of players............................................................................................. 131
14.1. Acquiring clubs in Germany ............................................... 131
14.2. Foreign clubs........................................................................ 132
15. Social security contributions ...................................................... 133
15.1. Private health insurance and employer subsidy .................. 134
15.2. Self-employment................................................................... 134
ITALY
MARCO VALDONIO AND MAURO MESSI ............................................. 135
1. Introduction................................................................................... 135
2. Standard tax residence rules applicable to football players 136
3. Classification of income earned by professional football players............................................................................................. 138
4. Taxation of income derived by football players from their sport performances ....................................................................... 139
4.1. Italian tax resident football player ....................................... 140
4.2. Non-Italian tax resident football players ............................. 143
5. Taxation of income deriving from the exploitation of image rights................................................................................................ 144
5.1. Income qualification ............................................................. 144
5.2. Taxation of income deriving from the exploitation of image rights.................................................................................... 145
6. Special tax regimes applicable to individuals moving to Italy 147
6.1. The “impatriate regime” ...................................................... 147
6.2. The lump sum tax regime..................................................... 150
7. Exit tax............................................................................................. 151
8. Termination and buy-out clauses .............................................. 151
8.1. Termination clauses.............................................................. 151
8.2. Buy-out clauses.................................................................... 153
9. Taxation of transfers of players.................................................. 154
9.1. National transfer of players.................................................. 154
9.2. International transfer of players .......................................... 156
10. Social Security contribution regime ......................................... 157
NETHERLANDS
SANDER MICHAËL, MARTHE VAN DRIEL AND NIELS MELOEN ...... 159
1. Introduction................................................................................... 159
2. Standard tax residence rules applicable to football players 160
2.1. Tax residence ........................................................................ 161
2.2. Dual residence...................................................................... 161
3. Tax rates applicable to football players for the purposes of direct tax on income ..................................................................... 162
3.1. Football player considered Dutch tax resident..................... 162
3.2. Football player considered non-resident for tax purposes in the Netherlands.................................................................... 163
3.3. Relief from double taxation .................................................. 163
4. Special tax regime for inbound expatriates (“expatriates tax regime”) .......................................................................................... 164
5. Tax treatment of football players’ image rights ...................... 166
6. Other tax advantages to consider............................................... 166
7. Exit tax............................................................................................. 168
8. Termination or buy-out clauses ................................................. 170
9. Taxation of international transfers of players ......................... 171
9.1. Tax treatment at club level ................................................... 171
9.2. Cross-border transfers and WHT......................................... 172
9.3. Taxation of transfer-related payments to players................. 172
10. Social security contribution regime .......................................... 173
PORTUGAL
MIGUEL PIMENTEL AND JOSÉ DIOGO MEGRE .................................... 175
1. Introduction................................................................................... 175
2. Standard tax residence rules for football players................... 176
3. Tax rates applicable to football players for the purposes of direct taxes on income (both earned by Portuguese tax residents and income earned by non-residents) ........................... 178
3.1. Portuguese-resident footballers............................................ 178
3.2. Non-resident football players............................................... 181
4. Special tax regime for individuals moving to Portugal ........ 183
4.1. Inbound expatriates incentives as of 2025: .......................... 183
4.2. Tax benefits for returning Portuguese players (ex-residents).................................................................................... 184
5. Special tax regime related to the exploitation of football players’ image rights .................................................................... 184
6. Other tax advantages to consider............................................... 187
6.1. Youth tax incentive (PIT Jovem).......................................... 188
6.2. Absence of wealth and inheritance tax................................. 188
6.3. Other exempt income ........................................................... 188
6.4. Business expenses for clubs.................................................. 189
7. Exit tax............................................................................................. 189
8. Termination or buy- out clauses (cláusulas de rescisão)........ 190
9. Taxation of international player transfers of players ............ 191
9.1. Transfer fee from a Portuguese club’s perspective................ 192
9.2. Transfer fee from the foreign club’s perspective.................... 192
9.3. VAT on international transfers ............................................ 194
10. Social security contribution regime .......................................... 194
QATAR
SAIF ABDULELAH AND SHIRAZ KHAN................................................ 197
1. Introduction................................................................................... 197
2. Tax residence rules........................................................................ 198
2.1. Standard tax residence rules applicable to football players.. 198
2.2. DTTs..................................................................................... 199
3. Direct taxes applicable to resident football players .............. 199
3.1. CIT regime............................................................................ 199
3.2. Exemptions for Qatari nationals.......................................... 201
3.3. Taxable income and rate....................................................... 201
4. Direct taxes applicable to non-resident football players ...... 202
4.1. WHT..................................................................................... 202
4.2. DTTs..................................................................................... 203
5. Club transfer fees.......................................................................... 204
5.1. Transfers by Qatar resident clubs ........................................ 204
5.2. Transfers by non-resident clubs ........................................... 206
6. VAT .................................................................................................. 206
7. Social security contributions ...................................................... 207
SAUDI ARABIA
SAIF ABDULELAH AND SHIRAZ KHAN................................................ 209
1. Introduction................................................................................... 209
2. Tax residence rules........................................................................ 211
3. Direct taxes applicable to resident football players .............. 214
4. Direct taxes applicable to non-resident football players ...... 218
5. Club transfer fees and exit considerations .............................. 221
5.1. Transfers by KSA resident clubs.......................................... 221
5.2. Transfers by non-resident clubs to KSA resident clubs................ 223
6. VAT .................................................................................................. 224
6.1. Taxable persons..................................................................... 224
6.2. Taxable supply of goods and services ................................... 225
6.3. Export of services — zero-rating ......................................... 225
7. Social security contribution regime .......................................... 226
SPAIN
FÉLIX PLAZA AND BELTRÁN SÁNCHEZ............................................... 229
1. Introduction................................................................................... 229
2. Standard tax residence rules applicable to football players 230
3. Tax rates applicable to football players for the purpose of direct taxes on income.................................................................. 232
3.1. Football player considered a Spanish tax resident ............... 233
3.2. Football player considered non-resident for tax purposes in Spain..................................................................................... 236
4. Special tax regime applicable to individuals moving to Spain (“inbound expatriates’ regime”)..................................... 237
5. Special tax regime related to the exploitation of football players’ image rights .................................................................... 240
6. Other tax advantages to consider............................................... 243
6.1. Outbound expatriates’ regime.............................................. 243
6.2. Contributions to the social welfare plan for professional
athletes.................................................................................. 243
7. Exit tax............................................................................................. 244
8. Termination or buy-out clauses ................................................. 245
9. Taxation of international transfers of players ......................... 247
10. Social security contribution regime .......................................... 250
SWITZERLAND
NATALIE DINI AND LUCA ASPESI.......................................................... 253
1. Introduction................................................................................... 253
2. Standard tax residence rules applicable to football players 254
3. Tax rates applicable to football players for the purposes of direct taxes on income (both income earned by Swiss tax residents and income earned by non-residents)..................... 257
3.1. Football player considered a Swiss tax resident................... 258
3.2. Football player considered non-resident for tax purposes in Switzerland .......................................................................... 263
4. Special tax regime applicable to individuals moving to Switzerland (“lump sum taxation”).......................................... 264
5. Special tax regime related to the exploitation of football players’ image rights .................................................................... 266
6. Other tax advantages to consider............................................... 268
7. Exit tax............................................................................................. 269
8. Termination or buy-out clauses ................................................. 270
9. Taxation of international transfers of players ......................... 272
10. Social security contribution regime .......................................... 273
UNITED ARAB EMIRATES
SAIF ABDULELAH AND SHIRAZ KHAN................................................ 277
1. Introduction................................................................................... 277
2. Tax residence rules........................................................................ 278
2.1. Tax residence rules for CIT purposes................................... 278
2.2. Tax residence in UAE — Other than for CIT purposes....... 280
3. Direct taxes applicable to resident football players .............. 282
3.1. Applicability of CIT ............................................................. 282
3.2. DTT considerations.............................................................. 283
4. Direct taxes applicable to non-resident football players ...... 283
5. Club transfer fees.......................................................................... 284
5.1. Transfers by UAE resident clubs ......................................... 284
5.2. Transfers by non-resident clubs ........................................... 285
6. VAT .................................................................................................. 286
6.1. Taxable Persons.................................................................... 286
6.2. Business................................................................................ 286
6.3. Taxable supply of goods and services ................................... 287
6.4. Export of Services — zero-rating......................................... 287
7. Social security contributions ...................................................... 288
UNITED KINGDOM
ELISSAVET GROUT, TOM MARGESSON AND AMY BRODERICK ....... 289
1. Introduction................................................................................... 289
2. Standard tax residence rules applicable to football players 289
2.1. Football players transferred to the UK................................. 289
2.2. Football players transferred from the UK ............................ 292
3. Income tax rates and national insurance contributions applicable to football players ............................................................... 293
4. The exploitation of football players’ image rights................. 293
5. Agency fees .................................................................................... 295
6. Transfer fees................................................................................... 296
6.1. Transfer to UK club from overseas club ............................... 296
6.2. Transfer from UK club to overseas club ............................... 297
PARTICIPATING LAW FIRMS .............................................................. 299