Further financial crisis for Barcelona after tax evasion bill gets passed

General view of Camp Nou. (Photo by Pablo Morano/BSR Agency/Getty Images)
General view of Camp Nou. (Photo by Pablo Morano/BSR Agency/Getty Images) /

Barcelona are already going through a tough time financially and their luck just got worse as they have now been hit with a tax evasion bill.

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The bill which has been passed by the European Union will affect clubs such as the Catalans, their main rivals, Real Madrid as well as Osasuna and Athletic Club. The bill tries to fight against tax evasion which is committed by top-level sports clubs.

Barcelona along with top Spanish sides get hit by fine due to tax evasion

The Court of Justice of the European Union, based in Luxembourg stated in its report,

"“The aid scheme at issue was, from the time of its adoption, liable to favour clubs operating as non-profit entities over clubs operating in the form of public limited sports companies, thereby conferring on them an advantage capable of falling within the scope of Article 107(1) TFEU.”Source Goal"

Fans who have little idea about how the tax system works for sporting organizations will have a tough time understanding why the Catalans have been hit with the fine. To make it a bit more simple, sporting organizations are companies that tries to make profits and thus they have a 30% tax rate that they must abide by.

However, the top clubs in Spain were treated as non-profit organizations, and thus their tax rate was significantly lower for more than 20 years. The European Commission in 2016 claimed that these clubs were taking advantage of this clause and gaining economically due to their lower tax bracket.

Barcelona challenged this in 2019 saying that they have not benefited from this tax disparity and asked the EU to prove their charges. However, now that the court has ruled for the EU’s favor, the Catalans could have to pay up to 5 million euros.

This comes at a very bad time for the club who are already 1.2 billion euros in debt. The only way the Catalans can come out of this situation to avoid bankruptcy is to let the fans back in. The ticket sales were one of their main source of income and they desperately need that back. All they can do now is hope that the pandemic will be over soon and everything can return back to normalcy.

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