Barcelona suffer further financial setback with big fine

A Spanish court’s decision has further complicated Barcelona’s financial predicament. The once-great Spanish team is now hardly recognizable as the winners they once were. The administration of previous president Josep Bartomeu inflicted severe damage to their authority both on and off the pitch.

In the last year, Barcelona stabilized finances by selling players to raise capital and stabilize their financial situation. They activated several new financial levers. Also, broadcast contracts have helped relieve some of the pressure on club president Joan Laporta.

Now, the club’s already precarious financial position has taken a further nosedive after another $25 million fine. The Blaugrana had previously disputed the claims, but it seems that Spain’s National Court has upheld the sentence.

The ruling settles overpayments of taxes on player agent fees between 2012 and 2015, forming part of a settlement. After the Central Economic-Administrative Court announced its decision in June 2020, Barca decided to appeal it, as per Mundo Deportivo.

The club paid $9.45 million in taxes and $3.27 million in penalties for 2012. They also had to settle $4.7 million for 2013, $5.6 million for 2014, and $1.52 million for 2015. But most importantly, the Blaugrana are under no need to pay up as of now while the procedure continues.

What did Spanish court say?

According to the TEAC, “from the facts found by the Inspectorate, it appears that the payments made by the Club have been made in the name and on behalf of the players who are the actual recipients of the services provided by the agents. They also added that the agents “are providing a service commissioned by the Club or are representing the Club”.

“This is not proven in any way and the reality reflected in the documents in the file is contrary to these circumstances, since the agents represent the players and act in their interests. The Inspectorate concludes that the relationship between FCB and the agents only serves to cover the payments made by the Club to the players. This assessment is shared by the Chamber,” a statement shared by Diario AS concluded.

What did Barcelona say about their financial issue?

Although Barcelona’s first appeal was unsuccessful, they will keep fighting the tax obligation that was imposed due to suspected errors.

“Barcelona has been informed of the verdict on income tax (IRPF) of the National Court (Audiencia Nacional) regarding the appeal. It’s presented by the club concerning the tax inspection concerning payments made to players’ agents between 2012 and 2015. Fútbol Club Barcelona shall be presenting an appeal to the Supreme Court (Tribunal Supremo).

“It comes as a surprise that the Contentious-Administrative house at the National Court has not considered the most recent jurisprudence of the Supreme Court on this matter. From which certain other football clubs have been able to benefit in recent sentences on the same matter.

“The divergent criteria of the National Court is also surprising when, a few months ago, another section accepted an appeal from our club on an identical issue to the current one that derived from the same inspection in relation to the Non-Resident Income Tax.

“This ruling does not entail any payment obligation for the club at present, this contingency being properly provisioned in the annual accounts”, they said in a statement.

Photo credits: IMAGO / Pond5 Images : IMAGO / Photo Players Images