AP Sports Law Office successfully represented a professional football player before the FIFA DRC regarding overdue payables from taxes.

Facts and arguments of the case

The parties signed a two-year employment contract,  from which tax obligation arose, which became known to the Player after more than 2 years. These obligations comprised overdue amounts payables from taxes, special solidarity fees and penalties-surcharges due to late payment.

AP Sports Law lodged a claim before FIFA, claiming the payment of the overdue payables in relation to taxes, including the standard tax amounts, the “so-called” special solidarity contribution and the surcharges that were generated due to the delayed payment.

The Club argued that FIFA was not competent to consider the claim of the Player because it was only a fiscal dispute that involved complex national tax laws and regulations. Subsidiarily, the Respondent argued, amongst other things, that:

• part of the amounts in question stemmed from sources other than the employment relationship between the Club and the Player
• the Player is solely responsible for the surcharges and
• part of the amount was not yet outstanding, because the Player had settled the payment of certain tax obligations in several instalments.

Considerations of the FIFA DRC

The Single Judge noted that the dispute at hand arose from issues related to national fiscal matters. Nonetheless, he stated that it was an employment-related dispute with an international dimension because the Settlement Agreement between the parties clearly explained the conditions under which the club undertook to pay all taxes that arose from the employment relationship (i.e., within the framework of the Player’s employment).

The Single Judge determined that the Club was also liable to pay the penalties-surcharges arising from the late payment of the tax obligations. It was emphasised that the Club did not show any proactive attitude to avoid these financial burdens nor provided any meaningful reply to the Player’s notices.

Regarding the tax amounts settled by the Player to be paid in instalments, the Single Judge determined that the Club shall also pay these amounts to the Claimant, despite the fact that not all the instalments had become due, for reasons of procedural economy.