This post is also available in: esEspañol

In its order of January 23, 2018, the European General Court (“EGC”) rejected the appeal filed by QF, a Spanish basketball club, against the decision of the European Commission (“EC”) of July 4, 2016, (final decision C(2016) 4046, available here) on the state aid implemented by Spain for certain football clubs.

In its decision, the EC declared the tax regime under Act 10/1990 on Sports as state aid incompatible with article 107 TFEU, ordering the Kingdom of Spain to recover that aid. Under article 19 (1) of Act 10/1990, professional sports clubs participating in competitions at state level must convert into public limited sports companies and, therefore, are subject to the general company tax regime instead of to the special regime for non-profit entities. However, under the seventh additional provision of Act 10/1990, football clubs with a positive balance in certain financial years are exempt from the obligation to convert into public limited sports companies, meaning that they continue to be considered non-profit entities under Spanish tax law.

This tax regime applied to four Spanish professional football clubs: Athletic Club Bilbao, Club Atlético Osasuna, FC Barcelona and Real Madrid CF.

In its claim against the EC’s decision, the QF club argues that the EC should have also declared as state aid article 19 (4) of Act 10/1990, which establishes that public limited sports companies can only participate in official professional competitions in one sport. According to the plaintiff, football clubs to which article 19 would not apply based on their status as non-profit entities could participate in professional sports competitions in different sporting activities and, therefore, consolidate the accounts corresponding to football and basketball, which would directly affect the calculation of the company tax base.

However, after hearing the EC claim that it would study this fact during the state aid recovery phase, the QF club understood that it would obtain the protection of the court it sought after and that its legitimate interest had disappeared.

We highlight that, according to repeated case law by the EGC, an appeal for annulment filed by an individual or a company is only admitted when the appellant seeks to obtain annulment of the challenged act.

Given this interest, it is understood that annulment of that act can have legal consequences and that the appeal, based on its outcome, can lead to a benefit for the appellant.

 

 

 

This post is also available in: esEspañol

Autores:

Asociada

2 artículos



blanca.marzal@cuatrecasas.com

Leave a Reply

Your email address will not be published. Required fields are marked *