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Spain’s World Cup Champs Lose to Tax Collector in Bonus Wrangle

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Jan. 14 (Bloomberg) -- Spain’s 2010 World Cup soccer champions have met their match: the tax collector.

The team captained by Iker Casillas has to pay a 43 percent tax rate on its bonus under a government agreement between Spain and the tournament host, South Africa, a tax agency official said by telephone. Each player got 600,000 euros ($800,760) from the Spanish federation for the victory, according to the sports newspaper Marca.

The Spanish soccer federation asked the government if players could pay only the 15 percent tax rate applicable in South Africa, provoking criticism in parliament in November. That won’t be possible, the official said. He declined to be identified in line with government policy.

“A national team should pay its taxes to the Spanish tax authorities,” Jose Morales, a spokesman for Izquierda Unida, the United Left party, said by telephone. “It’s not a private entity like Real Madrid or Rafael Nadal.”

The team paid a lower tax rate on a bonus for winning the 2008 European Championship, held in Austria and Switzerland. That was possible under a different agreement between European countries, the tax agency official said.

“The players just wanted to exercise their rights” by approaching the government, Jose Antonio Iniesta, whose son Andres scored Spain’s winning goal, said by telephone. “There’s no question they wanted to do anything illegal.”

To contact the reporter on this story: Alex Duff in Madrid at aduff4@bloomberg.net.

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net.

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