On Tuesday, 26 February, the judges at the General Court of the European Union annulled the European Commission's decision to classify the tax regime that applied to four Spanish professional football clubs from 1990 to 2015 as illegal State aid and to ask the Spanish authorities to recover the sums that should allegedly have been paid.
Spanish professional sports clubs were obliged to change into limited sports companies (LSCs) under a 1990 law. However, as a result of an exemption, four clubs - Fútbol Club Barcelona (Barcelona), Club Atlético Osasuna (Pamplona), Athletic Club (Bilbao) and Real Madrid Club de Fútbol (Madrid) - remained as non-profit legal entities and therefore benefited from a lower rate of income tax until 2015 than the rate that applied to clubs that were incorporated as LSCs.
On 4 July 2016, the Commission decided that the scheme constituted State aid that was incompatible with EU law and ordered the Spanish government to recover the appropriate sums of money (see EUROPE 11586).
Fútbol Club Barcelona and Athletic Club Bilbao brought actions for annulment before the General Court opposing that decision. Although Bilbao’s appeal was dismissed, FC Barcelona’s appeal involving the four clubs was successful, with the General Court annulling the Commission's action.
In the light of the arguments presented by the Commission in its decision, the Court held that the Commission had not been able to demonstrate that the scheme that applied to the four clubs mentioned above had given them an advantage over the scheme that applied to other Spanish professional teams formed as LSCs.
In the opinion of the General Court, the Commission did not take into account all the data made available to it in reaching its conclusion. The judges therefore annulled the decision. (Original version in French by Lucas Tripoteau)