The Basque midfielder is on the brink of signing for Bayern Munich with tax formalities being cast aside after revelations from Spanish treasury and LFP.
Athletic Bilbao star, Javi http://www.senore.com/Football-soccer/Martinez-c24468, has been linked with a move to German Bundesliga as Bayern Munich look to pounce on the opportunity of his acquisition. The Spanish World Cup winner has a buyout clause of 40 million Euros, a sum that bring complex tax
proceedings with it.
Bayern do not like the summary of activities associated with the transfer and have asked Los Leones to aid them in the way.
Chairman of the Bavarian club’s board, Karl Heinz Rummenigge, acknowledged that there are difficulties in the negotiations, and revealed that they are getting tired of the position Bilbao have taken.
"Termination clauses that have all the Spanish players are structured in a way so complicated, it might create some problems in the legal and tax aspects."
After several discussions and meetings, Spanish media is rife with suggestions that the deal could be completed over the weekend. The supposed tax issues do not come into play in the said transfer, giving the Bundesliga giants area to roam around.
The transfer operation of Javi Martinez is tax exempt and will not have any VAT or income tax added on the deal. Bayern will have deposit the 40 million Euros in the bank account of Athletic Bilbao to get the player they have been craving for the duration
of 2012 summer transfer window.
Statute of the FIFA Article 17.2 comes into action which paves way for Bayern in their capture. The article states that the buyout clause must be paid by the player and his new club together and there is no obligation on the new club and respective player
to pay taxation monies.
The transaction is exempt from VAT following the precedent set by Ronaldo’s transfer to Real Madrid 10 years ago. Liga de Futbol Profesional has it in good accord that binding the specified payment of the clause; clubs are exempt from this tax as it is considered
compensatory in nature.
On the other hand, the proceedings are exempt from income tax depending on FIFA’s Article on Players' Status. Bayern together with the player will make payment of the clause, and hence, it will be a transaction between two clubs, two legal entities.
Since there is no individual involved, no income tax will be levied on the whole deal. The personal income tax applies only to individuals and therefore it is inapplicable in the current scenario.
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