A Luxembourg-based General Court on Tuesday annulled an earlier European Union (EU) state-aid ruling which required FC Barcelona, Real Madrid and two other Spanish football clubs to pay back taxes.
The latest ruling of the court is the second time the regulators, which are seeking to tackle tax avoidance, are suffering a setback.
A news report by Reuters stated that the European Commission’s crackdown in recent years had resulted in orders to multinationals, including Apple, Starbucks, Fiat Chrysler, Engie and Amazon. The affected multinationals pay billions of euros in back taxes to various EU countries.
The report recalled that the EU competition enforcer said in its 2016 ruling that FC Barcelona, Real Madrid, Athletic Bilbao and Osasuna enjoyed a 25 percent tax rate for more than 20 years, in comparison to the 30 percent norm for sports companies.
This is even as it added that the clubs each had to pay back up to 5 million euros (£4.3 million) and that the lower tax rate came about because the four were treated as non-profit organisations, instead of professional football clubs with limited liability.
However, in its Tuesday’s ruling, 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 to 2015.
The presiding judge said: “The Commission has not shown to the requisite legal standard that the measure at issue conferred an advantage on its beneficiaries.”
Only last week, the Commission 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.
