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To Lure FIFA, France Floats the Promise of a Tax-Free Home
To Lure FIFA, France Floats the Promise of a Tax-Free Home
(about 4 hours later)
Call it a friendship with extremely generous benefits.
Call it a friendship with extremely generous benefits.
French lawmakers this week are considering a plan promoted by the government of President Emmanuel Macron that would encourage international sports bodies to move to the country by promising them what critics have labeled a “tax gift” unavailable to most French companies and citizens.
French lawmakers this week are considering a plan promoted by the government of President Emmanuel Macron that would encourage international sports bodies to move to the country by promising them what critics have labeled a “tax gift” unavailable to most French companies and citizens.
The plan, offered as an amendment to the government’s 2024 budget, would reward organizations that relocate by exempting them, and their employees, from a broad swath of corporate, property and income taxes — savings that could be worth millions of dollars every year.
The plan, offered as an amendment to the government’s 2024 budget, would reward organizations that relocate by exempting them, and their employees, from a broad swath of corporate, property and income taxes — savings that could be worth millions of dollars every year.
Potential beneficiaries include the governing bodies of a broad range of sports, including more than 30 international federations recognized by the International Olympic Committee. But both supporters and detractors of the tax breaks said that they were aimed at luring one governing body in particular: FIFA.
Potential beneficiaries include the governing bodies of a broad range of sports, including more than 30 international federations recognized by the International Olympic Committee. But both supporters and detractors of the tax breaks said that they were aimed at luring one governing body in particular: FIFA.
FIFA, world soccer’s governing body, has been based in Zurich since 1932. But in recent years, its leadership has discussed a relocation to greener pastures amid frustrations with life in Switzerland, which was the site of not only its growth into a billion-dollar commercial juggernaut but also its greatest scandal.
FIFA, world soccer’s governing body, has been based in Zurich since 1932. But in recent years, its leadership has discussed a relocation to greener pastures amid frustrations with life in Switzerland, which was the site of not only its growth into a billion-dollar commercial juggernaut but also its greatest scandal.
Aware of that discontent at its highest levels, France is hoping to bring FIFA — which was born in Paris in 1904 — home.
The French politicians who created the tax plan said that they were hoping it would entice governing bodies by offering them the type of tax benefits that until now were available in few European countries beyond Switzerland. Under the proposal, organizations that move would be exempted from corporate taxes, local property taxes and even levies on some of their income. The executives and employees who come along would be exempt from income tax for at least five years.
“We can’t be blind on the FIFA subject,” said Mathieu Lefèvre, a deputy from Renaissance, the political party founded by Mr. Macron, and a signatory to the amendment. “FIFA is very important.”
The amendment granting favorable tax status to sports federations, according to Mr. Lefèvre, is similar to other recent pro-business changes enacted by the French government, including efforts to attract some big banks to Paris from London after Britain voted to leave the European Union in 2016. “We want to make France great again,” Mr. Lefèvre said.
Like some other measures that were criticized for favoring business over workers — notably changes this year to France’s pension system, which raised the country’s retirement age — the push to attract sports federations through tax benefits does not enjoy universal support. The Senate, the upper house of the French Parliament, recently voted to delete the text related to sports federations from the government’s budget document.
“The words of the senators were quite firm, where everyone thought that it was some kind of scandal, a nonsense, that it was something that really did not have to be done,” said Jean-Claude Raux, an opposition lawmaker. But in a sign of the commitment to the amendment, lawmakers reworked the measure to ensure the proposal was included.
Grilled by lawmakers at a recent hearing, France’s sports minister, Amélie Oudéa-Castéra, defended the proposed law, rejecting claims that it amounted to a “tax gift” to sporting federations. Instead, she said, the law would simply place international sports federations within a framework already enjoyed by the other international organizations based in France.
But unlike those bodies, which include UNESCO, the United Nations’ cultural organization, FIFA is a behemoth with almost 2,000 staff members, global commercial interests and revenues in the billions. It recently estimated the four-year cycle through to the 2026 World Cup in North America, for example, would generate $11 billion in revenue.
French politicians, including Ms. Oudéa-Castéra, have been at pains to point out that the tax breaks would be limited to FIFA’s noncommercial activities, those parts of the organization responsible for governing and developing soccer around the world. But it is unclear how France plans to make that distinction.
FIFA declined to comment on the proposed changes. But under its president, Gianni Infantino, its efforts to move some important operations away from its glass-and-steel headquarters in Zurich have been gathering pace in recent months. FIFA has already said that it will move most of its legal department to Miami. And it has opened satellite offices in South America, Africa and Asia as part of Mr. Infantino’s oft-quoted ambition to make FIFA “truly global.”
Mr. Infantino could be one of the most prominent beneficiaries of the proposed exemption on income taxes: His pretax salary and bonus package totaled $3.9 million, according to FIFA’s most recent accounts. He also oversaw the opening of yet another FIFA outpost in Paris, in 2021. The FIFA pied-à-terre in the French capital, inside the opulent Hôtel de la Marine, includes an office reserved for Mr. Infantino with sweeping views of some of the city’s most popular sights, including the Eiffel Tower. It currently houses the FIFA department responsible for global soccer development.
Mr. Lefèvre, the lawmaker, said that attracting FIFA would be a coup for France’s global image. Others were less effusive about the implications of the association.
Mr. Infantino was only elevated to FIFA’s top leadership after a corruption scandal in 2015 led to the downfall of its previous leadership. Since then, he has spoken frequently and emphatically about a reformed organization. Recent decisions, though, have prompted renewed scrutiny about the way FIFA conducts its business. One recent change in the organization’s rules will theoretically allow Mr. Infantino to stay in power beyond a 12-year-term limit. Another directed the hosting rights to the 2034 World Cup to Saudi Arabia, to the surprise of some of FIFA’s own member nations.
Belkhir Belhaddad, a French lawmaker who opposes the tax amendment, said that FIFA’s operations must be subject to greater oversight if the changes were approved.
“These sports organizations are important, they are useful, they have an economic, financial and social relevance,” Mr. Belhaddad said. “In the world we live in today, we need them. But they need to be regulated. How do we do it? Who takes care of it?”
The proposals for a new tax status specific to international sports bodies also received a negative assessment from the Conseil d’État, France’s highest administrative court, which received a draft version in September. The court issued a negative opinion on the grounds that such a move constituted a “breach of tax equality,” according to news reports in France.
