How Much Tax do Professional Soccer Players Pay?

The salary for a professional athlete is high, especially for soccer players. Therefore, it's normal that doubts arise about their finances and taxes. Here, we'll tell you how much tax they really pay.

More and more soccer players are being investigated for tax evasion. This leads us to ask ourselves, how much tax do professional soccer players really pay?

Generally speaking, professional athletes pay the highest tax margins, that’s to say 47 percent. That percentage corresponds to 85 percent of the income of athletes. While the other 15 percent is due to corporate tax. In the following article, we’ll tell you in greater detail about the financial obligations that these athletes face.

Tax for professional soccer players

Professional soccer players in Spain can redistribute their tax burden in order to avoid the progressive nature of personal income tax. In addition, according to Spanish law, 85 percent of a professional athlete’s income (in this specific case, a soccer player) is subject to personal income tax. This taxation is at a marginal maximum of 47 percent.

At the same time, the other 15 percent of their income can be paid through corporate taxes. In these cases, the benefit is taxed at 28 percent of the tax.

This may seem like a high tax rate compared to other countries such as France, for example. Here, the tax rate is around 75 percent for one million euros. However, Spain is still attractive to players and is still more advantageous for foreigners. 

Regarding the last point, it’s important to emphasize that there are differences depending on the time of taxation. These differences involve the money received and whether or not the player is a resident of the country.

In the past, under the law known as Beckham, the most highly paid people could pay a rate of 24 percent. Although the maximum bracket was set at 52 percent, professional soccer players usually paid 24 percent.

The above law was modified, and the players with old contracts continue to adhere to those norms. However, newly signed contracts will pay only 24 percent for the first 600,000 euros of earnings. After reaching that threshold, the players are subject to the same rates as Spanish residents.

Tax differences according to community

Another aspect that has to be taken into consideration, in addition to the official residence of the player, is the actual part of Spain in which the player lives. This means that a player who lives in Catalunia would pay around 32,000 euros more in taxes, than a player who lives in Madrid, for example.

These differences between autonomous communities in Spain are due to the so-called “regional sections.” For example, the regional section of Catalunia has rates that can reach up to 56 percent.

In another law dating back to the year 1975, Spain established certain links and covenants with various countries. A very tangible example is Brazil. If the goalie Iker Casillas had earned 720,000 euros for the World Cup, 25 percent of that amount would have stayed in Brazil. This is thanks to the law that both countries agreed to in an effort to avoid double-taxing.

Taxing and image rights

In addition to the gross income from their contracts, many players take advantage of their image in order to supplement their income. To do this, a professional soccer player contracts a company to which they cede their rights. Once they’ve signed their rights over, their image can be broadly shared, commanding a high price.

Countries have established some basic regulations, some of which have to do with the image rights related to the soccer club. Of course, these rights are intimately related to a player’s work activity. It goes without saying that everything related to image rights makes matters related to tax purposes a little more complicated.

For example, if a player goes on a press tour while wearing the team’s emblem, it’s considered work-related. This applies even when the player is paid separately. The objective of the IRS is to keep an eye on all image-related activities, even when it involves the family members of the players in question.

The taxes that a soccer player pays can also vary depending on the official residence of the player, even internally within Spain. In general, 85 percent of their income must be paid at the maximum tax margin of 47 percent.

Only foreign players pay 24 percent of their income up to 600,000 euros. After they cross this threshold, they’ll pay the same amount as the rest of the players. What do you think about the tax payable by professional soccer players?