Barcelona and Real Madrid hit with another financial nightmare

Recent reports suggest that

and

will be facing up to €5 million (£4m/$6m) charges by the European Union for failing to pay their taxes.

Other

clubs including

and

will also have to submit to the new fight against tax avoidance by paying their dues.

This event was led by a statement from the Court of Justice of the European Union (CJEU) in Luxembourg, which read:

“The aid scheme at issue was, from the time of its adoption, liable to favour clubs operating as non-profit entities over clubs operating in the form of public limited sports companies, thereby conferring on them an advantage capable of falling within the scope of Article 107(1) TFEU.”

Over the past 20 years, Barcelona and Real Madrid were treated as non-profit organizations, who benefited from a lower tax rate in comparison to their other rivals, but the European Commission hopes to give an end to the privileged La Liga sides.

The first European Commission attempts to bring attention to this matter began in 2016, which were later wiped out by the General Court in 2019 for lack of evidence. This led the commission to shift their case to the CJEU.

Barcelona’s current debts are reported to be around €1.2 billion (£1.1b/$1.5b) and with the financial struggles caused by the pandemic many clubs continue to be pressured by money loss.

Still these teams hope that once the fans are welcomed back to the stadiums, their problems will also vanish into thin air.

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