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EU's top court rules Spanish fooball clubs received illegal state aid

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EU's top court deals blow to Barcelona, Real Madrid and two other Spanish football clubs
EU's top court deals blow to Barcelona, Real Madrid and two other Spanish football clubs   -   Copyright  afp
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The EU top court has ruled that Spanish tax laws unfairly benefit some of the country's top football clubs.

A verdict handed out by the European Court of Justice stated the government had given illegal state aid to four of its major clubs, including FC Barcelona and Real Madrid.

Spanish law allows the clubs to pay taxes as nonprofit sports clubs, rather than sports companies.

In 2016, Brussels penalised several La Liga teams over the preferential tax breaks and ordered them to repay millions of euros to the Spanish authorities.

The Commission said the four clubs were treated as non-profit organisations and had paid tax rate on profit that was a 5% lower that of their rivals for more than 20 years without an objective justification.

It added the money to be recovered would be limited to €5 million per club but that the precise amount to be paid back should be fixed by Spanish authorities.

In February 2019, the European General Court ruled against the Commission saying there was no proof football clubs gained any benefit from paying taxes as nonprofits.

But that ruling has now been set aside by the ECJ.

FC Barcelona is currently going through a rough patch - former president Josep Bartomeu and other officials were arrested on Monday over possible irregularities during his administration.

The arrests came less than a week before the club holds presidential elections.

Barcelona is also coming out of its first season without a trophy since 2007-2008 and has a debt of more than €1.1 billion largely due to the coronavirus crisis.