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Sport

French clubs take aim at tax-exempt Monaco

© AFP

Text by Stéphanie TROUILLARD

Latest update : 2013-10-26

Monaco is to join other French football clubs for a 30 November strike to protest against a proposed 75 percent tax on salaries over 1 million euros. But the fact that Monaco is exempt from this tax has angered the other clubs.

Monaco football club will show solidarity with its rivals by striking on November 30 in protest against a proposed 75 percent tax on French companies that pay individual employees salaries of more than 1 million euros.

But the fact that Monaco would be exempt from this tax - since being outside France means it does not fall under the French tax regime - has angered other clubs.

While the smaller clubs in Ligue 1 worry about their financial future, the peculiar status of Monaco, one of the two most economically powerful teams in the competition, is considered by many to be “aberrant.” Even while they are embroiled in a dispute over the tax, the other clubs are still taking swings at Monaco.

“You should know that nearly all the Ligue 1 clubs, except Paris Saint-Germain and Monaco, are in debt,” Frédéric de Saint-Sernin, the president of Stade Rennais, told the newspaper Ouest-France.

“The French clubs are obliged to sell their best players to break even. It’s a vicious circle and it's a bit much that Monaco will be exempt from this tax."

His counterpart at Lille, Michel Seydoux, is worried that the tax will increase the huge financial advantage that the two Ligue 1 superpowers, Monaco and PSG, have over the rest of Ligue 1.

The tax would cost PSG only 19.5 million euros because of a cap at 5 percent of revenue.

"This 75 percent tax was supposed to hit the richest clubs. In the end, the government has not kept its promises because football’s middle class will also be deeply affected. When that’s who’s suffering, the country is going wrong,” Seydoux told Figaro. “Instead of being two-tier championship it will be four-speed."

70 million euros of tax savings

As Régis Juanico, the socialist deputy in the National Assembly responsible for sports finance, wrote on Le Monde’s website, Monaco will increase its savings to 70 million euros.

“If the club was subject to French law, the amount of tax due would be 20 million,” he said, adding that Monaco already enjoys an estimated 50 million euro tax break.

The Professional Football League (LFP) has been battling against this inequality with Monaco for much of the past year. In March, the LFP decided the best way to abolish this tax loophole would mean all clubs having their company offices in France.

Monaco has responded by taking the case to the French Council of State. In July, the club lost the first round, but the matter is far from closed. The Council of State will make a final decision in February 2014.
 

Date created : 2013-10-25

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