Spain: Tax regime benefitting professional football clubs; rules on determining state aid (CJEU judgment)

Spain: Tax regime benefitting football clubs

The Court of Justice of the European Union (CJEU) today issued a judgment setting aside findings of the EU General Court (that had annulled a decision of the European Commissioner classifying as state aid, a tax regime benefitting four Spanish professional football clubs).


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The judgment from the CJEU specifies the evidentiary requirements for the European Commission to prove whether a tax regime confers an advantage on its beneficiaries and, therefore, whether it is capable of constituting state aid.

The case is: Commission v. Fútbol Club Barcelona (C-362/19, 4 March 2021)


According to today’s release [PDF 283 KB] from the CJEU, a Spanish law (1990) required all Spanish professional sports clubs to convert into public limited sports companies, except for professional sports clubs that had achieved a positive financial balance during the financial years preceding enactment of the law.

Four professional football clubs came within the exception, and thus elected to continue operating in the form of non-profit legal persons and as such benefited from a special rate of income tax that, until 2016, remained below the rate applicable to public limited sports companies.

The position of the European Commission (expressed in a July 2016 decision) was that the preferential corporate tax rate for the four clubs constituted unlawful and incompatible state aid. The EC ordered Spain to discontinue the tax regime and to recover the aid provided to the four clubs.

The football clubs sought review by the General Court of the European Union, which in February 2019, annulled the EC’s decision on a finding that the EC had not satisfied the requisite legal standard for proving an economic advantage had been conferred on the football club beneficiaries of the measure. In particular, the General Court found that the EC had not sufficiently assessed whether the advantage resulting from the reduced tax rate could be offset by the less favourable deduction rate for reinvestment of extraordinary profits applicable to clubs operating in the form of non-profit legal persons compared to that applicable to entities operating in the form of public limited sports companies.

The CJEU today in the appeal brought by the EC set aside the judgment of the General Court.

In support of its appeal, the EC raised a single ground alleging infringement of Article 107(1) of the EU Treaty (TFEU) so far as concerns:

  • First, the concept of an “advantage capable of constituting State aid” within the meaning of that provision
  • Second, the EC’s duty of diligence in the context of the examination of the existence of aid—in particular from the point of view of the existence of an advantage

The CJEU specified the evidentiary requirements incumbent on the EC in its analysis as to whether a tax regime confers an advantage on its beneficiaries and, therefore, whether it is capable of constituting state aid within the meaning of Article 107(1) TFEU.

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