Barcelona and Real Madrid received millions in ILLEGAL tax breaks as European Court of Justice upholds decision that state aid received over past 25 years must be paid back
- In 2016, four Spanish clubs were ordered to pay back tax breaks from the 1990s
- Barcelona appealed the decision against them and it was originally annulled
- However, the European Court of Justice has ruled the money must be paid back
Barcelona have lost a bid before the EU’s top court to overturn a claim it received unfair state aid through tax breaks, in a decision that also has implication for rivals Real Madrid.
It means both clubs are liable to repay tens of millions of pounds they received from the Spanish government from the 1990s.
The verdict is the latest in a growing list of problems besetting the Nou Camp outfit, who are currently battling debts of more than €1bn.
Barcelona will have to pay back tens of millions of pounds it received in tax breaks in Spain
On top of that, the club’s headquarters were raided by police last week, and former president Josep Bartomeu arrested over allegations he used club finances to carry out a smear campaign against his adversaries, including striker Lionel Messi.
The European Court of Justice dismissed an appeal lodged by the Catalan side over a February 2019 ruling that found its status as a non-profit organisation gave it an unfair lower tax rate than that applied to most other Spanish clubs.
Under a Spanish law dating back three decades, only Barcelona, Pamplona, Athletic Bilbao and Real Madrid were granted the non-profit status, and all other professional clubs had to register as limited sports companies subject to higher taxes.
Hit by a European Commission claim that it was, in effect, receiving state aid, Barcelona argued that there was no legal proof of an economic advantage.
But the EU court sided with the commission in finding that the conditions met the state aid definition under European law.
It ruled that the EU’s lower court had erred in its handling of the matter, and stated that ‘the aid scheme at issue was… liable to favour clubs operating as non-profit entities’.
The European Court of Justice ruled against the Spanish club in its hearing on Thursday
