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EU court throws out tax ruling against Barcelona, Real

REUTERS/Marcelo del Pozo

Barcelona, Real Madrid and two other Spanish soccer clubs will not have to pay back taxes after a court on Tuesday annulled an EU state aid ruling in a second setback for regulators seeking to tackle tax avoidance.

The European Commission’s crackdown in recent years has resulted in orders to multinationals including Apple, Starbucks, Fiat Chrysler, Engie and Amazon to pay billions of euros in back taxes to various EU countries.

The EU competition enforcer said in its 2016 ruling that Barcelona, Real Madrid, Athletic Bilbao and Osasuna enjoyed a 25 percent tax rate for more than 20 years, compared to the 30 percent norm for sports companies. It said the clubs each had to pay back up to 5 million euros ($5.7 million).

The lower tax rate came about because the four were treated as non-profit organisations instead of professional football clubs with limited liability.

The Luxembourg-based General Court said the Commission made several errors in assessing the case and used figures that only covered four tax years while the scheme ran from 1990-2015.

“The Commission has not shown to the requisite legal standard that the measure at issue conferred an advantage on its beneficiaries,” judges said.

The Commission last week suffered a rare defeat when the General Court struck down its ruling against a Belgian tax break that benefited as many as 35 companies including AB InBev and BP.

REUTERS/Reporting by Foo Yun Chee; editing by Philip Blenkinsop and Ed Osmond

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