It is well known that the presentation of taxes is not confirmed until the statute of limitations has passed, 4 years as a general rule, or by verification of these by the Tax Agency. Something like the biblical text “man proposes and God disposes” -without wanting to be metaphorical-.
The same thing has happened to Valencia CF in its VAT settlements, which were verified by Treasury officials and the sports club took the decision of the Tax Agency to court until the resolution of the Supreme Court, which is examined in the following article. , STS 2916/2024.
In the appeal presented by Valencia CF, two issues are mainly examined. On the one hand, determine if the Tax Administration can, in exercise of the qualification power provided for in Article 13 LGT, isolate the economic flow of the business that is said to be classified, and place it in another parallel business scheme. On the other hand, determine whether the transfers or loans of soccer players to another club on a temporary basis, and in which no price is set for the transfer, constitute services provided for consideration for the purposes of article 4 of the Law of the VAT and, consequently, are subject to the tax.
Specifically, the taxation of the relationship between sports club, commercial agent and footballer is examined.
Valencia CF's position regarding the first issue was that of paying the invoices that the commercial agents sent to the club as a result of the signing of players, transfers or other contractual matters. These invoices carry VAT that the club deducted.
On the other hand, the Administration, regarding the first question, defended that, even though the monetary transaction occurred between the club and the agent, in reality the agent was providing a service to the player and the club paid that service to the agent on behalf of the player. player. For this reason, the amounts paid by the club to the agent or representative had to be considered greater monetary remuneration for the footballer as performance of work, so that the VAT fee borne by Valencia CF was not deductible, proceeding to reduce the fees borne and repercussions on the assumptions of reversal of the taxable person.
Finally, regarding the second question, the club defended that the operation was not subject to VAT because it was not onerous, the Administration's position being the opposite.
The Supreme Court's consideration of these two questions was:
- It reiterates the doctrine declared in the SSTS of July 2, 2020 and July 22, 2020 and February 23, 2023 and upholds the appeal of Valencia CF, arguing the following: The Administration has exceeded the scope of art. 13 LGT has isolated the economic flow of the business and has placed it in another parallel business scheme. Reiterating the aforementioned jurisprudence: “legal institutions, or rather administrative powers – such as those analyzed here – are not free to use, but must be used in the legally provided terms and, in the case prosecuted, the power provided for in article 13 of the Law General Tax as a classification of the business, act or fact with tax significance, is not sufficient to declare the tax consequences that the regularization carried out entails. […]».
- In the second question, the Court agrees with the Administration, arguing that: “The transfers of federative rights of soccer players on a temporary basis, in which no certain price is set for the transfer, meet all the requirements to be considered provision of services carried out for consideration, for the purposes of article 4.One of the VAT Law, since there is a "direct" relationship between the service provided and the consideration received. In effect, the service provided is the transfer of federative rights (art. 11 of the LIVA).”
It will be necessary to examine the Administration's liquidations in which a parallel negotiation scheme is created, isolating the economic flow of the business, a usual practice on the part of the Administration, and may - depending on the circumstances - go to court to decide whether a use is being made. excess of art. 13 LGT such as that of the present case.
Mateo Carmona Bayarri
Tax Area
