SBD Global/June 24, 2014/Finance

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  • Spain's 'Beckham Law' Will No Longer Allow Foreign Athletes To Pay Reduced Tax Rate

    A fiscal reform passed by the Spanish government will "change a regulation for foreign athletes known as the 'Beckham law,'" according to Francisco Núñez of EL MUNDO. The law "will no longer allow professional athletes" to pay a tax rate of 24% instead of the rate of 52% required for other Spanish citizens earning annual salaries of €300,000 ($408,000) or more. This "difference has helped Spanish football compete against clubs in other countries: in France, for example," players earning €1M ($1.4M) or more per year must pay 75% in taxes. The measure will affect "the new signings that basketball or football clubs make, but not those players who are already under contract." Under the "new reform," athletes will be taxed 24% on the first €600,000 ($815,000) they earn, and they will have to pay "the same rate as anyone else on the rest of their earnings," which will be 47% starting in '15 (EL MUNDO, 6/23).

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  • Bundesliga Side Hamburg SV Announces Loss For Fourth Consecutive Season

    Bundesliga club Hamburg SV "has made a loss for the fourth consecutive season," according to the SID. Hamburg Exec Chair Carl Jarchow said, "It will be less than €5 million ($6.8M)." The club, which remained in the top flight only after winning its relegation matchup, "was in the red during the previous season as well." The club hopes that "the decision four weeks ago to separate its professional football department from the main club will start the turnaround" (SID, 6/23).

    LOST SEASON: 3-LIGA reported German 3rd League football club Energie Cottbus will lose €1.6M ($2.18M) "due to its relegation from the 2nd Bundesliga." The club will lose out on €800,000 ($1.09M) from TV rights, €300,000 ($410,000) in sponsorships and €500,000 ($680,000) in overall revenue (3-LIGA, 6/23).

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  • Lionel Messi Makes $30M Payment To Tax Authorities For Debts From '10-12

    Lionel Messi on Friday paid Spain's tax authorities €22M ($30M) to "cover his debts" corresponding to '10-12, according to Eduardo Magallón of LA VANGUARDIA. This payment is "independent of the ongoing judicial process against Messi and of the prosecutor's request last week that Messi be cleared of tax evasion" (LA VANGUARDIA, 6/22). MARCA reported Messi "has now voluntarily made an additional tax declaration for the years 2010, 2011 and 2012." To balance the books, the footballer will "sign a financial guarantee" to pay a total of €25M ($34M) before '18. The fine resulting from the €4.1M ($5.6M) fraud "still remains outstanding." Messi's cooperation with the tax office "looks likely to be taken into consideration to secure him the minimum penalty, which is 65% of the amount defrauded" --  €2.7M ($3.7M) (MARCA, 6/23).

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  • Barcelona's Bill For 'Neymar-Gate' Could Reach $30M If Tax Fraud Charge Sticks

    The Spanish tax authorities have "yet to settle proceedings over 'Neymar-gate,'" according to Luis Fernando Rojo of MARCA. This concerns the Brazilian's move to Barcelona and the "dubious payments made to the player himself and companies in his family's name." Barça has "already paid" the Spanish Inland Revenue Service €13.5M in relation to "their failure to pay tax equating to 25% of the various signing-on fees set out in the deal with the forward." However, the club has "always protested its innocence on this count and claimed that the issue was a matter of interpretation." If Barcelona is "ultimately found guilty of tax fraud or reach a settlement with the authorities, the absolute minimum they will have to fork out" is 65% of the amount the club initially failed to pay -- which means "at least" €8.7M ($11.8M) (MARCA, 6/23).

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  • Russia's State Audit Chamber Finds $88M Overspend On Stadiums For 2018 World Cup

    Russia's state Audit Chamber has found that the "design work for its 2018 stadia has been over-priced" by as much as $88M, according to INSIDE WORLD FOOTBALL. The audit of seven stadiums found that the real value of the "design, planning and projection" works was $80M -- not the $171M contracted in '12-13. The investigation into stadium design costs and budget was "for the stadiums in Kaliningrad, Samara, Saransk, Volgograd, Rostov-on-Don, Yekaterinburg and Nizhny Novgorod." Seven state contracts to the value of 5.8B rubles were awarded. Five of the seven contract pitches were won by construction company FSUE. The audit chamber's cost consultants said that the "largest overestimation of design work is at the stadium in Nizhny Novgorod," which should have cost an estimated $7.2M. The contract awarded was for $26M, almost four times as much. In Rostov-on-Don and Kaliningrad contracts of 892.9M rubles and 849.7M rubles were awarded -- "about three times higher than the state auditor believes the real costs should be" (INSIDE WORLD FOOTBALL, 6/23).

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