Published by the firm Winter – Dávila & Associés
Paris, 15 December 2022
Author: Loïc Soubeyran-Viotto
Member of the Paris Bar since 2017, Loïc Soubeyran-Viotto holds a Master’s Degree in Business Law and a Certificate of Specialization in Tax Law from the University of Montpellier as well as Master’s Degree in Notary Law from the University of Paris-Dauphine.
Before founding his own law firm in association with Chassaint & Cerclé notary office, he worked for Aramis and CMS Francis Lefebvre law firms in Paris.
In addition to his professional practice, Loïc teaches International Tax Law at the University of Montpellier. He is a member of the “Institut des Avocats Conseils Fiscaux” (IACF), the “Rugby Club du Palais” and is fluent in English.
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🇪🇸 Versión en Español
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We remember that after the final won by “Les Bleus” against Croatia in 2018, the cheeky Adil Rami had cut short the congratulatory speech of President Emmanuel Macron who announced, “I would like to thank you”, by adding “for the taxes!”. The former defender of Olympique de Marseille was on this shot well inspired but also, it appears, well informed about the taxation related to the bonuses paid by the French Football Federation (FFF). This is what we are going to explain based on the 2022 World Cup in Qatar.
- Players French tax residents in 2022
Under French tax law, the rule is simple: individuals domiciled in France for tax purposes are subject to income tax in France on all their income from both French and foreign sources, which is known as an “unlimited” tax liability. The criterion of the taxpayer’s nationality has no impact on the tax liability in France.
For an individual to be regarded as resident of France, one of the following tests must be met (under section 4 B of the French Tax Code, FTC):
- having the permanent home or main abode in France;
- performing the main professional activity in France;
- having the centre of economic interests in France.
A person is deemed to be domiciled for tax purposes in France when he or she meets one of these alternative conditions.
For example, Lionel Messi, whose family lives in Paris and who carries out his professional activity in France, is deemed to be French tax resident and, as a rule, taxed in France on his worldwide income.
The strictness of the domestic law principle of worldwide taxation must, however, be tempered considering the tax treaties aimed at eliminating taxation entered by France, as the rule of international treaty prevails over domestic law.
YOU CAN ALSO READ: Where will Lionel Messi pay his taxes?
In this respect, article 13 of the tax treaty signed between France and Qatar on December 4, 1990, which is based on the OECD model tax treaty, provides that in the event of a temporary assignment abroad, salaries remain taxable in the State of residence (and consequently are exempt from tax in the State of source (i.e. the State where the activity is carried out)) if the following three conditions are met:
- the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days during the fiscal year in question; and
- the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
- the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
The French tax resident players enrolled for the 2022 World Cup should not meet any of these conditions. Therefore, the World cup premiums paid to these players by their Federations and the FFF, should be taxable in France at the top income tax rate of 45% and the exceptional contribution on high incomes at a rate of 3 to 4%. It may be noted that sponsorship revenues are handled differently.
According to published information, the players of the French team could receive a bonus of €402,000 in case of victory in the World Cup final in Qatar, which would bring the Treasury an amount of €177,000 per player tax resident in France for income tax purposes only in 2022 (social security contributions are additional).
- Players non-residents of France in 2022 for tax purposes
Players who are not French tax residents should not suffer any withholding tax in France in the event of payment of bonuses by the FFF.
Wages and similar income arising in France and received by persons residing outside France are taxed at source, by a withholding taxe, as provided for in Article 182 A of the FTC. According to the administrative doctrine (BOI-IR-DOMIC-10-20-20-10 no. 30 of December 28, 2018), all sums and benefits allocated or provided to the employee in relation to or in consideration of his work or function in France are subject to withholding tax. Therefore, the notion of “French-source wages and salaries” applies only to work (or a function) performed in France and not to work performed abroad but paid from France.
In the same way, article 182 B of the FTC cannot be applied to the case of players residing abroad and remunerated for a sports service performed in Qatar. Indeed, paragraph d) of this article refers to sports services provided or used in France, i.e. those that are physically performed there, which is not the case here. Moreover, it cannot be considered that the services were used in France, insofar as the payment of bonuses represents only a game premium, to the exclusion of any remuneration for sponsoring or the granting of audiovisual broadcasting rights, for example.
YOU CAN ALSO READ: Transfer of football players international taxation in Spain
- The French team and the Moroccan team, French Treasury’s favorite teams
As you can see, only French tax resident players will be subject to income tax and additional taxes in France on their game premiums. France and Morocco being the nations counting the most players in this category, their victory in the final of the World Cup 2022 could be warmly welcomed by the French Treasury.
However, given that at the time of this article’s writing, the final will be between France and Argentina, the French Treasury will support its team out of love for its country but also because of the large amounts of taxes it could collect.
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Original language of the article: Spanish
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 Countries with players domiciled fiscally in France who could have reached the final:
- Argentine (2) : Nicolas Tagliafico (Olympique Lyonnais) et Lionel Messi (Paris Saint-Germain) ;
- Croatie (1) : Lovro Majer (Stade Rennais) ;
- France (6) : Steve Mandanda (Stade Rennais), Axel Disasi, Youssouf Fofana (Association sportive de Monaco Football Club), Jordan Veretout, Mattéo Guendouzi (Olympique de Marseille), Kylian Mbappé (Paris Saint-Germain) ;
- Maroc (5) : Achraf Dari (Stade Brestois 29), Achraf Hakimi (Paris Saint-Germain), Azzedine Ounahi, Sofiane Boufal (Angers Sporting Club de l’Ouest), Zakaria Aboukhlal (Toulouse Football Club).
This article was published by Winter – Dávila & Associés, an international law firm based in Paris, in France, represented by lawyers specialized in sports law, corporate law, arbitration and representation.
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