French football clubs will pay 75 percent super tax
France confirmed on Monday that the 75 percent super tax on millionaires will indeed apply to the country’s football clubs, despite opposition from league bosses. However the government has made one compromise to appease mega wealthy clubs like PSG and Monaco.
After months of “will they” or “won’t they” speculation, France’s sports minister Velerie Fourneyron confirmed on Monday that the country’s football clubs will not be exempt from the new 75 percent super tax.
The tax, one of President François Hollande’s flagship election proposals, is included in the government’s 2014 budget, which was announced last week, but has not yet been approved by parliament.
Under the proposal companies will be liable to pay the 75 tax rate for the portion of employees' salaries above €1million annually.
And despite warnings from France’s football chiefs that the French league would be ruined if clubs had to pay the tax, Fourneyron insisted there will be no exceptions to the rule.
“There are no special measures. Football will be affected by the tax on high incomes,” the minister told Le Figaro.
“Why should clubs be exempt from this tax?” she added.
Two French clubs in particular will be hit hard by the new tax.
Monaco and Paris Saint-Germain have spent enormous sums of money in the last two years, bringing in some of the biggest players in world football like Zlatan Ibrahimovic and Radamel Falcao and paying them astronomical salaries.
However league chief Frederic Thiriez said it won’t just be PSG and Monaco which will be affected. THhriez estimates as many as 13 clubs in Ligue1 will be hit by the tax for a total of €44 million.
However Fourneyron dismissed said “the impact be will be much lower than the figures announced by Thiriez.” The minister also announced a cap on the tax in a bid to appease worried clubs.
The revenue from tax will be capped at 5 percent of turnover of clubs in order to reflect “the fragile economic model of football clubs”, she said.
The tax will only be claimed on income earned in the years 2013 and 2014.
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After months of “will they” or “won’t they” speculation, France’s sports minister Velerie Fourneyron confirmed on Monday that the country’s football clubs will not be exempt from the new 75 percent super tax.
The tax, one of President François Hollande’s flagship election proposals, is included in the government’s 2014 budget, which was announced last week, but has not yet been approved by parliament.
Under the proposal companies will be liable to pay the 75 tax rate for the portion of employees' salaries above €1million annually.
And despite warnings from France’s football chiefs that the French league would be ruined if clubs had to pay the tax, Fourneyron insisted there will be no exceptions to the rule.
“There are no special measures. Football will be affected by the tax on high incomes,” the minister told Le Figaro.
“Why should clubs be exempt from this tax?” she added.
Two French clubs in particular will be hit hard by the new tax.
Monaco and Paris Saint-Germain have spent enormous sums of money in the last two years, bringing in some of the biggest players in world football like Zlatan Ibrahimovic and Radamel Falcao and paying them astronomical salaries.
However league chief Frederic Thiriez said it won’t just be PSG and Monaco which will be affected. THhriez estimates as many as 13 clubs in Ligue1 will be hit by the tax for a total of €44 million.
However Fourneyron dismissed said “the impact be will be much lower than the figures announced by Thiriez.” The minister also announced a cap on the tax in a bid to appease worried clubs.
The revenue from tax will be capped at 5 percent of turnover of clubs in order to reflect “the fragile economic model of football clubs”, she said.
The tax will only be claimed on income earned in the years 2013 and 2014.
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