BRUSSELS: Athletic Bilbao, Barcelona. Osasuna and Real Madrid have won an appeal against a European Commission that they owed millions of euro in tax repayments to the Spanish state.

Competition Commissioner Margrethe Vestager had ruled that the Spanish State had not recovered enough tax from these clubs, giving them an advantage over their competitors which was incompatible with EU state aid rules.

As a result, the EU had demanded that Spain collect the lost taxes retrospectively. This decision was challenged by FC Barcelona and Athletic Bilbao before the EU court. While Athletic’s appeal was dismissed, Barça’s appeal was successful.

In 1990 all Spanish professional sports clubs were forced to convert into sports corporations in an agreement to resolve their massive debts, in particular in terms of tax and social security contributions.

Only clubs which had made a profit in previous years were allowed to remain member-controlled clubs and thus benefit from a lower income tax rate. That applied to Barcelona, ​​Osasuna, ​​Bilbao and Madrid.

Non-profit-making companies were subject to a lower tax rate than sports operations before 2016. The commission estimated that up to €5m in lost tax per club should be recovered.

Madrid countered that, in certain circumstances, the rule change was a disadvantage and that the commission had not proved the new tax deduction system as “more favorable in the long run.”

The EU court in Luxembourg decided that the commission had misunderstood “the facts”.

The decision can be appealed to the European Court of Justice, the highest judicial body in the EU, within two months.

#################