"Taxes have an impact on almost every business decision that a club makes"

In the third edition of ECA Insights, we speak with ECA General Counsel, José Luis Andrade, ahead of the ECA Legal Workshop: Football & Tax, due to take place on 5-6 December, about current areas of interest in football law. In the interview, we ask José about the aims of the upcoming workshop and why its focus, tax, is such an important topic for clubs to address, as well as FIFA's new transfer regulations and the impact they may have on clubs. 

Welcome to ECA Insights, José. The ‘ECA Legal Workshop: Football & Tax’ takes place at the Tottenham Hotspur Stadium in London this week, and will bring together senior executives and lawyers from clubs across Europe. What are the main aims of this workshop?

“The main aim of the workshop is to enable clubs to benefit from the expertise of the speakers whom we invited and enhance their knowledge on the topics that will be discussed - obviously with an emphasis on international tax matters as applicable to clubs’ activities.

Workshops and conferences are, of course, not designed to constitute intensive and in-depth training initiatives, but, when properly done, they can raise awareness to key matters, which attendees can then further explore based on their specific needs. Also, what makes this event a potentially enriching experience is obviously the nature of the audience: club executives are experienced professionals in their own right and deal on a daily basis with matters which will be touched upon by the speakers. This should provide a good opportunity for exchanges between speakers and the audience, which may further improve the quality of the discussions. Hopefully, the manner in which we structured the workshop and the quality of the speakers will make this a good investment of clubs’ time!

As a secondary objective, the workshop should also serve as another opportunity for clubs to network with each other, share experiences, make contacts or, sometimes, just reconnect. This is important from a business perspective, but may also simply be fulfilling from a personal standpoint. Sometimes it’s just nice to see some old friends.”

The focus of the event will be on tax law and its impact on European football clubs. Why is this such an important topic to address?

“One of the key areas of activity of the ECA Legal Department is to provide legal advice to our members, particularly around sporting and regulatory matters. In providing these services, we realised that there were a growing number of tax-related enquiries.

As is the case with other industries, taxes have an impact on almost every business decision that a club makes. When a club signs a player from another club, there will be an agreement between the two clubs, an agreement between the new club and the player and, oftentimes, an agreement with one or more agents. One of the fundamental elements that must be factored in when considering and negotiating these transactions, are the applicable taxes. How much should or can be paid, what are the potential liabilities and what is the most efficient structure for the transaction, are all decisions that will fundamentally depend on the fiscal assessment of the deal. The fact that the football market relies heavily on cross border transactions, makes the tax assessment of the activities in question that much more challenging, as different legal systems and jurisdictions come into play. And this is merely a reference to ‘sporting’ transactions in this context. Tax considerations evidently have a far-reaching scope of application, as they extend to any commercial matters.

It is because of this wide range of tax issues that are relevant to club football that we decided that this workshop should revolve around one main topic, so that we could explore different angles and different issues. Nonetheless, I must say that we do have high expectations regarding the Brexit panel discussion and the FIFA/UEFA Regulatory Q&A. The first because club executives have been ‘begging’ for more information and advice on the potential consequences of Brexit and the second because the rules issued by FIFA & UEFA (notably the FIFA RSTP and the UEFA Disciplinary Regulations) continue to be the pieces of international private regulation which have the most relevant impact on clubs’ activities. Giving the clubs the possibility to engage in a Q&A with the World and European governing bodies is certainly a privilege. We are happy to confirm that Emilio Garcia (FIFA’s Chief Legal Officer) and Angelo Rigopoulos (UEFA Managing Director of Integrity and Regulatory) will be representing their respective organisations.”

The most visible legal development in the game over the past year has been the changes to the transfer system. ECA has been fully engaged in the decision making on these matters via representation on the FIFA Task Force Transfer System. What impact will these reforms have on clubs?

“Transfers of professional football players are at the core of our clubs’ activities. They are a fundamental element of the business and, in fact, a crucial source of revenue for many clubs across Europe. As the main investors in the game, clubs are a key stakeholder in the reform process. The reform process is being driven by the FIFA Football Stakeholders’ Committee and, at more technical level, by the Transfer System Task Force. ECA is duly represented in both bodies and has sought to ensure, in a constructive manner, that clubs’ interests and concerns are duly taken into account when reforms to the current rules are considered.

The FIFA Council has already approved a set of important reforms. The establishment of a clearing house is an important step and should ensure that training rewards are collected and distributed more effectively, for the benefit of clubs that invest in the training and development of young players. On training rewards, one should not underestimate the importance of the approval to extend the solidarity mechanism to national transfers with an international dimension. This should provide significant additional funds which will be vital for training clubs to continue to feel incentivised to invest on youth development. The re-introduction of licensing for agents on a global level, together with a robust regulatory framework, should contribute to increase the standard of the activity of agents, bring additional transparency to transactions and provide agents with a more harmonised platform for the rendering of their services efficiently across multiple jurisdictions. As is public knowledge, other relevant measures have been approved and additional topics for potential amendments will still have to be discussed. Once this reform process is over and the changes are fully implemented, we will be in a better position to assess the practical significance of the changes and, hopefully, conclude that we have an improved transfer system.”