He Supreme Court has rejected the appeal by Santos Futebol Clube against the sentence of the National audience which endorsed the liquidation of the Treasury that imposed the payment of 2.7 million euros for the Non-Resident Income Tax for the years 2013 and 2015 for the capital gain obtained from the transfer of Neymar’s federative rights to the Barcelona Soccer Club.
In its ruling, the Contentious-Administrative Chamber establishes that “the economic rights derived from the transmission of the federative rights of a player received by a club or a sports entity not resident in Spain for the transfer of that player to a club or sports entity resident in Spain constitute a capital gain subject to non-resident income tax”.
The court points out that there is no doubt about the existence of a transferable right, the so-called “federative rights”, which have an economic content and whose transmission determines a capital gain for the transferor. He adds that the destination club, for the registration of the player in the Royal Spanish Football Federation (RFEF), must provide, among other things, an international transfer certificate when the player was providing services in a club in another State, which “ “reinforces the consideration that rights are being transferred between clubs and that the payment made by the Spanish club of destination responds to the payment of a right exercisable in Spain that until then was the property of the foreign club of origin.”
“It is, therefore, conclusive that the purpose of these contracts is not compensation for the early termination of a previous employment relationship, as the appellant maintains, but rather the transfer of rights, federative rights of a player, exercisable in Spain through registration of the player in a football federation recognized by FIFA by the new club,” explains the ruling.
Therefore, he understands that the conclusion “cannot be other than to consider that the appellant Club was the owner of certain rights of economic content, called federative rights, referring to the player Neymar, which made up his assets and that through the contract of 31 On May 2013, he transferred them to Futbol Club Barcelona in exchange for a price”, that is, they constituted a capital gain for him.
Next, the Court defends that this gain must be taxed in Spain since the rights transferred will be exercised in Spain by the acquiring club or sports entity, becoming part of its assets. And furthermore in accordance with article 13 of the Agreement between the Spanish State and the Federative Republic of Brazil to avoid double taxation and prevent fiscal evasion with respect to income taxes, which allows Spain to subject to tax the profit obtained in accordance with its domestic law, in this case, in accordance with the consolidated text of the Non-Resident Income Tax Law.
For the court, “the appellant’s allegation that responds to a static position cannot be accepted, in which the place in which the right was exercised until the date of the transfer is taken into account, since the destination of the operation in that the profit is obtained, without any doubt that the destination of the federative rights transmitted was to be exercised in Spain.”
2024-03-18 13:37:16
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