1. Facts

A German professional soccer club in the 1st German national league carried out transfers of professional soccer players and contract extensions with their current players in the years 2000 and 2001. The soccer players were primarily advised by players’ agents who had been granted the necessary license by FIFA.

The transfer of a new soccer player or the contract extension began with the soccer club contacting the respective players’ agent.Immediately after the soccer player had signed an employmentcontract, the soccer club and the players’ agent concludeda written “payment agreement”.By concluding this agreement, the soccerclub and the individual player’s agent agreedthat theagentwould receive a generalfee for the “consultancyandsupport for the transfer or the contract extension”.

Thereafter, the players’ agent issued an invoice to the soccer club with a separate VAT amount. The soccer club claimed the VAT amounts as input VAT.

2. Tax office –tax court

Following a VAT audit, the tax authorities considered that the soccer club was not entitled to deduct input VAT from the players’agents’ invoices.

The tax court Düsseldorf decided in favour of the soccer club. Due to the transfer and consultancy, the players’ agents were found to have rendered a service to the soccer club.

3. The German Federal Fiscal Court’s judgment

The German Federal Fiscal Court has remitted the legal case back to the tax court Düsseldorf. According to the German Federal Fiscal Court, the factual finding carried out by the tax court is not sufficient for a final decision. It is doubtful whether there is a contract between the soccer club and the players’ agents. Indeed, the FIFA players’ agent regulations do not allow for the players’ agents to represent both sides, namely the soccer player and the soccer club.

Contact:

Dr. Oliver Zugmaier
Lawyer, Specialist lawyer for tax law
Phone: +49 (0)89 / 217 50 12 - 60
oliver.zugmaier@kmlz.de

As per: 29.10.2013