PSG breaking records: is Financial Fair-Play at risk?

During the most recent transfer window, Paris Saint-Germain (PSG) made two transfers that are said to have changed the economics of the football transfer market for the coming years. Transfer fees of EUR 222 million (Neymar) and EUR 180 million (Mbappé) were unthinkable before this summer, but may now have become the new standard for world-class players. Whilst these amounts themselves may raise questions regarding PSG’s compliance with UEFA’s Financial Fair-Play Regulations (FFP Regulations), it is clear that these questions only become more pressing when taking into account the specific nature of the deals.

The fact that PSG seems to have paid, directly or indirectly, an amount of EUR 222 million to Barcelona is likely to result in (inter)national taxation issues. The payment or reimbursement of the release fee owed by Neymar to FC Barcelona may qualify as a “benefit in kind” in the hands of Neymar, potentially taxable as additional salary. As a result PSG may end up having to pay a significantly higher (grossed up) amount. To the extent that the payment is to be qualified as a payment made by PSG to secure Neymar’s future services, French social security and tax law will have to be considered. In addition, there is the risk that Neymar’s training clubs will claim solidarity contributions regarding this amount. For the “loan and option to buy” – the construction used for Mbappé’s transfer - it will be interesting to...

Why not join us?

Football Legal is an independent media publishing football law contents on a daily basis dedicated to all football law practitioners (lawyers, clubs, federations, intermediaries, football stakeholders, etc.).

Get started

PSG breaking records: is Financial Fair-Play at risk?

Why not join us?

Topics

Keywords

Authored by