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EU High Court rules against Barca, Madrid in Tax Case

The highest court of the European Union dealt a severe blow to Barcelona, ​​Real Madrid and two other Spanish clubs on Thursday by ratifying a decision by the bloc’s executive body ordering them to return illegal state aid.

In its final ruling, the Court of Justice of the European Union annulled the ruling of a lower community court that two years ago determined that the tax regime of the clubs was legal and “definitively rejected” the action presented by Barcelona.

In 2019, the Luxembourg-based General Court of the EU struck down a 2016 European Commission decision ordering clubs to reimburse millions of euros in tax compensation.

The Commission determined at that time that the public support measures granted by Spain to various professional football teams gave them an unfair advantage over their rivals, and therefore violated Community rules.

When the General Court annulled this decision, it said that the commission had failed to show that the tax regime constituted an illegal economic advantage.

But the high court now pointed out that it made an error in law and pointed out that the measures, which also benefited Osasuna and Athletic de Bilbao, de facto supposed an aid scheme that covered an undetermined amount of time and money, and that they were not tied to a specific project.

According to the Commission, the four entities were treated as non-profit organizations and paid a profit tax 5% lower than their rivals for more than 20 years without any objective justification.

The money to be recovered should be limited to 5 million euros (6 million dollars) per club, but it must be the Spanish authorities who establish the exact amount.

Ben Oakley
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