FIFA's tax exemptions for England's World Cup bid
Thu 13th May 2010 | FIFA
FIFA are reported to by expecting substantial tax exemptions from England to host the World Cup in 2018.
An article by the BBC reveals the full scale of the remarkable tax concessions that the world football authority FIFA demands of countries that wish to host a World Cup competition.
The bidding nations have been asked to comply with a wide variety of conditions that FIFA has laid down - and which it would like to keep confidential.
Among them is that the entire event should be free of tax for FIFA.
"Any host country requires a comprehensive tax exemption to be given to FIFA and further parties involved in the hosting and staging of an event," said a FIFA spokesman.
This means that to be successful in its bid, the UK government must agree to forgo tens of millions of pounds in tax for the benefit of FIFA, which - as a charitable organisation - pays hardly any tax to its home country of Switzerland.
It also appears to mean that the tournament income of the players, some of whom are among the highest paid earners in the world, should also be exempt from tax.
The decision on where the 2018 and 2022 competitions are to be staged will be taken by FIFA in December, after considering the huge Bid Books that the contending nations are about to submit.
In this year's competition in South Africa, a "tax-free bubble" has been established around the tournament at FIFA's request, relieving FIFA, its subsidiaries, and foreign football associations which are taking part, of income tax, customs duties, and VAT.
This tax relief also applies to the various organisations designated as FIFA's commercial affiliates, licensees, host broadcasters, broadcast rights agencies, merchandise partners, service providers, concession operators and providers of hospitality.
For these organisations the tax concessions only apply when the goods or services are provided at an official FIFA site.
A standard 15% tax on the earnings of foreign sportsmen and entertainers will be applied as normal and ticket sales will have 14% VAT applied.
So how much money may go untaxed if a World Cup is staged in the UK?
No one can tell yet, but FIFA's accounts for 2007, which cover the previous year's World Cup, give a flavour of the huge amounts of money that sloshed around.
Nearly 900 million Swiss Francs (£552m at current exchange rates) were spent by FIFA on organising the tournament, including prize money and preparation payments for participating teams, on their hotel and travelling costs, and in a subsidy to the organising committee.
Much of that might have been taxed in Germany had it not been for the tournament's favourable tax arrangements.
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