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Is the tax exemption enjoyed by UEFA legal? (shift)

The Commissioner for Competition, Mr. Vestager facing the press on November 20 (credit: EBS)
The Commissioner for Competition, Mr. Vestager facing the press on November 20 (credit: EBS)

(BRUSSELS2) The European Commission did not want to “ comment », for the moment, the French draft finance law allowing tax exemption for international sporting events. Principle which would notably allow UEFA to benefit from tax exemption (excluding VAT) to organize Euro 2016 football (June 10 to July 10, 2016). And the European Commissioner for Competition, Margrethe Vestager, whom I questioned today, admits “ not knowing »… Indeed, off camera, an expert from the European executive admits to having received “ no notification » from France for this device. Which seems surprising...

A tax exemption is state aid

We are concretely in a case of disguised State aid, or even “fiscal distortion” between Member States. If theEuro 2016 benefits from a tax exemption, it actually benefits from aid (in the form of reduced expenses). For a long time, the Commission and the European justice system have recognized that a tax exemption could constitute state aid. And France should have notified the European Commission of this measure to obtain a green light (there are numerous exceptions allowing state aid to be legitimized). This is not general, but specific, and directed towards a person or several people who do not obey objective criteria (*).

UEFA subject to competition

It also cannot be denied that the organization of football competitions is not entirely humanitarian or non-profit. Here again, the European position is quite clear. The European Commission and the Court of Justice have already recognized that UEFA was an organization which fell within the scope of competition control (see the investigation closed in 2002 on the rules imposed on clubs). The rules it lays down are considered to be rules of an association of businesses recognized as an agreement. And this event generates significant economic benefits.

A distortion of competition which leads to a general rule

Finally, there is clearly a distortion of competition in a European sports competition market. The usual arguments, which underline the need to face international competition, cannot apply here since it is a question of attracting this… European event. If this demonstration goes to France, it will not go to another country in Europe. And vice versa. UEFA will have an easy time negotiating the same system in other European countries. Which will, in fact, amount to establishing a general rule of tax exemption for certain lucrative events and not others.


(*) We can read on this point the rather in-depth article by Oskar van Maren, published on the blog specializing in Sports Law, which analyzes in detail the conditions, or not, of state aid, applied to the case of UEFA

Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).