TAX POLICY & PROFESSIONAL SPORTS ORGANIZATIONS


I will be writing my paper about Tax Policy and how it relates to professional sports organizations. I understand that tax law and tax anything sounds (and quite frankly is) very boring, but if these organizations claim tax exemption and tax-payers are affected, it starts to hit close to home. FIFA will be the primary organization that I focus on, but I also want to discuss Major League Baseball (MLB) and the National Football League (NFL) because their relationship with taxes is more closely related to us, U.S. citizens. I will argue that professional sports organizations not only engage in tax avoidance arrangements but also influence tax policies in the domains in which they operate.

I found an interesting article about FIFA that was written by FIFA. On its website, FIFA has a document titled “Questions on the Financial Report 2013 for Congress 2014.” This document includes questions that are typically asked about FIFA, and FIFA responds to each question. The questions are related to financial information, and most include information that is usually used against FIFA. This is the first question in the document: “Doesn’t FIFA pay any tax in Zurich?” This question ‘contradicts’ popular belief that FIFA, as a non-profit organization, pays no tax. FIFA responds: “Yes it does.” It continues by stating that it pays taxes on its taxable profit. Other external sources that I have researched cite that FIFA does not pay taxes on revenues from the World Cup, and it is these specific revenues that constitute a large majority of FIFA’s profit.

This second question on the document: “Does FIFA guarantee total tax exemption for it and its sponsors in host countries, as reported in various section[s] of the media?” Many sources chastise FIFA for mandating that any country who is to host a World Cup must allow FIFA to be tax exempt. If true, this would indicate the FIFA exerts a large enough influence to temporarily change tax policies in countries. FIFA states, however, that “FIFA does not ask the candidate countries for its sponsors to enjoy ‘unrestricted or even complete exemption from any form of taxation.’” FIFA does admit to requesting limited and specific tax exemption for its sponsors and other service providers. This seems like a cop-out move for FIFA, where they deny the full allegations but do admit to some tax-exemption techniques.

The document lists 4 more questions that I will not delve into in this post. This source is reliable because it is written by FIFA, and in direct response from the criticism that it faces. During my paper, I will likely make liberal use of this document because it will help clarify the discrepancies between FIFA and its allegations.

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