The Netherlands and Spain top football’s financial attractiveness league
Singapore, 22 May 2013 – Domestic football seasons may be drawing to a close across Western Europe, but the debate still rages; what country can lay claim to the best league?
According to EY, however, professional footballers should consider more than the perceived quality of a competition when contemplating their futures.
EY’s latest tax and professional footballers report, prepared on behalf of FIFPro and the European Commission, ranks the Netherlands and Spain as the most attractive destinations for players based on local financial provisions.
A combination of tax rates, pension plans and post-football career prospects – not everyone enjoys the enduring financial perks of being one of the game’s ‘Galacticos’ – sees the Netherland top the table, with Spain coming a close second. Turkey and Russia are identified as the strongest new contenders mainly due to their low tax rates. The UK is ranked sixth, behind the two most recent World Cup finalists plus Denmark, Sweden and France.
Pension plans needed to combat ‘financial black hole’
Wiebe Brink, tax partner at EY, said: “Despite its relatively high tax rate, the Netherlands offers footballers extremely efficient pension plans with tax provisions customised to their situation. Those nearing the end of their careers run little risk of settling in a country facing a financial black hole.
“Footballers can look to countries in Eastern Europe including Bulgaria and the Czech Republic for the lowest tax rates. However, it isn’t unheard of for footballers to play without regular employment contracts in these countries, meaning clubs pay no social security contributions. It’s an unstable environment, but a potentially more lucrative one in the short term at least.
“Turkey is currently proving to be a big draw owing to the 15% tax rate created to target footballers, although that is geared towards those at the top of the game. Other countries such as Russia and the Ukraine are also actively using their tax systems to attract and retain foreign players.”
Employment prospects diminished by global recession
The report also notes that retiring footballers are not immune to the effects of the global economic recession, with tight labour market conditions narrowing the prospects of a second career.
Western European clubs have responded to that by developing pension plans tailored to footballers. In such cases, pension benefits often start immediately after career termination, participation is compulsory and taxes on payments are typically levied at a lower rate.
In Germany, where the entry age of 62 is higher, the plan has been extended to cover coaches and scouts.
Clubs have a ‘corporate responsibility’ to their players
Brink added: “No Eastern European country currently offers such bespoke plans, but that’s set to change partly in response to the interests shown by the European Commission. But countries will have to introduce regular employment contracts before that can happen.
“Clubs have to place more emphasis on their corporate responsibility. More thought has to be put into bridging the gap between a playing a second career by offering educational opportunities to current and former players.”
Notes to Editors
EY is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.
EY refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com. This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients