When the same transfer costs 8.5% more

The fiscal disparity between autonomies conditions the market for Spanish clubs; from 54% that pay personal income tax in the Valencian Community to 45.5% in Madrid.

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Javier Tebas has long insisted on the need for a reduction in taxation for footballers. His leitmotif is that "if we lose the best talents, the audiovisual value of the product will fall and we will generate less wealth for the country." In Spain, after excluding them from the Beckham Law, footballers do not have tax benefits and, among other details, it is regulated that the commissions of the agents are taxed as personal income tax and not by corporation tax. In England, Italy or Germany, taxation gives soccer players more breathing space. But, in addition, in Spain not all clubs and footballers pay the same taxes.

Valencia, Villarreal, Levante or Elche pay personal income tax 8.5% more than Real Madrid, Atlético, Getafe or Rayo. Thus, a footballer who trades a net token of € 1.5M, a Valencian club would cost € 2.3M gross and a Madrid club € 2.1M; while to Seville, Betis, Cádiz or Granada, € 2.2M. For Griezmann, for example, charging the same net (€ 21M), Atlético would pay taxes 945,000 euros less than Barcelona.

The territorial borders between communities are also fiscal and each autonomous government has its own type of tax, with a margin percentage to raise and lower it. Thus, as regards the IRFP, in each income bracket there is a state tariff and an autonomous one, and the sum of both dictates the percentage to be taxed. Law 11/2020 of December 30 on the General State Budgets for 2021, introduced a new section in the scale, which is the one that affects the majority of First-class footballers: a state rate of 24.5% applicable to income over 240,000 euros. And to that percentage is added that of each autonomy.

The Valencian Community, since January 1, is the one that increased its applicable rate the most. Thus, in Castellón, Valencia and Alicante, income exceeding 175,000 euros (the minimum wage for Primera by agreement is 155,000) are taxed at 54%. In Navarra, 52%. On the opposite side of the ranking: Madrid, 45.5%. The signing of Mendi by Villarreal was close to not closing due to this variation in the IRFP rate change in the Valencian Community. In fact, the four First-Class Valencian clubs plan to discuss this tax issue with the Generalitat, given that if such a tax is maintained over time, they will lose their competitive level.

In times of lean cows like the current one, when free footballers are the jewel in the crown, such variation in percentages is key for a player to land here or there. And also when it comes to forcing out those who charge the most. Clubs that negotiate contracts in net, and assume the variation that may exist in the type of personal income tax, have seen their staff cost increase, which reduces their Financial Fair Play margin.

Photos from as.com

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