FIFA Sanction in Tax-Dodging Soccer Trade Overruled by Court

  • Court says governing body didn't have appropriate rule
  • Player moved between soccer clubs in Argentina via Uruguay

The top sports court overturned a fine of 15,000 Swiss francs ($16,370) handed down to Argentine soccer club Racing Club by FIFA for its part in a player transfer routed through Uruguay to avoid tax.

The Court of Arbitration for Sport said there wasn’t an appropriate rule in the soccer governing body’s regulations that would make the maneuver illegal, according to a May 5 verdict.

The player, Fernando Ortiz, in 2012 moved to Racing from fellow first-division team Velez Sarsfield via Atletica Sud America, a second-division Uruguayan club for which he never appeared. The so-called bridge transfer was apparently initiated by Ortiz to avoid income tax on his signing-on fee, the court said.

Argentine and Brazilian teams have routed more than $65 million of transfer deals through second-tier clubs in Uruguay since 1999 for financial reasons, according to Bloomberg News calculations. FIFA didn’t take disciplinary action against teams involved until 2014 -- two years after Argentina’s tax agency denounced the operations.

Ortiz would have been subject to a tax rate of about 30 percent in Argentina. The court recommended FIFA prepare a regulation to combat such transfers. FIFA didn’t immediately return an e-mail seeking comment.