FC Barcelona and Real Madrid will be forced to pay back millions of euros in illegal State aid after the EU’s highest court ruled Brussels was right to declare that beneficial tax arrangements they enjoyed for a quarter of a century were illegal, reported The Financial Times.
The decision by the European Court of Justice (ECJ) upholds previous rulings by the European Commission and comes as Barcelona, the world’s highest-earning football club, is enduring one of the biggest crises in its history.
This week police arrested the club’s former president, its current chief executive and its general counsel, in connection with a separate legal case ahead of a vote on Sunday, March 7, to decide its next president. Barcelona, which recorded a loss of €100 million last year, also has to contend with a debt pile of more than €1 billion.
In 2016 Margrethe Vestager, the EU’s competition chief supremo, ordered four Spanish football clubs to pay back tens of millions of euros received since the 1990s in the form of sweetheart property deals, tax breaks, and soft loans.
FC Barcelona subsequently contested the decision before the General Court, the EU’s second-highest tribunal, which annulled the Commission’s judgment. However, after a final appeal from Brussels the ECJ ruled in favor of the EU.
In its decision on Thursday — which is final — the ECJ deemed the tax scheme “liable to favour clubs operating as non-profit entities over clubs operating in the form of public limited sports companies”, holding that it could therefore qualify as illegal state aid under EU rules.
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