F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – solidarity contribution / contributo di solidarietà – (2020-2021) – fifa.com – atto non ufficiale – Decision 19 August 2020

Decision of the Single Judge of the sub-committee of the Dispute Resolution Chamber

passed on 19 August 2020,

regarding solidarity contribution for the transfer the player A

BY:

Geoff Thompson (England), Single Judge of the sub-committee of the Dispute Resolution Chamber

CLAIMANT:

B, Country B

RESPONDENT:

C, Country C

I. FACTS OF THE CASE

1. According to the player passport issued by the Country B Football Association, the player, A (hereinafter: the player), born on xxx, was registered with its affiliated club, B (hereinafter: Claimant) as from 1 August 2011 until 15 August 2015.

2. The sporting season in Country B runs as from 1 August until 31 July of the following year.

3. According to the information available in the Transfer Matching System (TMS), on 11 July 2019, the Country D club, D (hereinafter: D), concluded a transfer agreement with the Country C club, C (hereinafter: Respondent), for the transfer of the player from D to the Respondent for a transfer fee in the amount of EUR 6,500,000, payable as follows:

- EUR 2,200,000 by 10 July 2019;

- EUR 2,200,000 by 10 July 2020;

- EUR 2,100,000 by 10 July 2021.

4. According to the information available in the TMS, the player was registered with C on 5 August 2019.

5. On 29 January 2020, B lodged a claim for solidarity contribution regarding the permanent transfer of the player from D to the Respondent. In particular, B requested 40.41% of the solidarity contribution.

6. On 7 July 2020, the Claimant acknowledged receipt of a partial payment from the Respondent in the amount of EUR 33,440.

7. In its claim, the Claimant contested the deduction of taxes performed by the Respondent on the amount paid as solidarity contribution, stating that clubs do not have the faculty of deducting any amounts for any purposes whatsoever from the amount due.

8. In its reply, the Respondent did not contest the amount of the solidarity contribution due to the Claimant, given that there is no double taxation agreement between Country B and Country C the Respondent had the obligation to withhold 24% of the amount in order to comply with the Country C Tax authorities. As such, the Respondent rejected the claim and indicated to have paid the amount of EUR 33,440 to the Claimant (solidarity contribution minus 24%).

9. The Respondent further acknowledged that the Claimant did not agree with withholding at the moment of the payment and invited the Claimant to contact its tax advisor, stating that "we consider that it should be possible to avoid the double taxation, deducting the WHT paid in Country C on your income tax return in Country B”.

10. Consequently, according to the Respondent, Country C tax regulations govern the payment considering that it is made by a Country C company. This is a consequence of the absence of a convention avoiding double taxation between Country C and Country B. In light of the foregoing, the Respondent considers that it has already paid the solidarity due with regard to the first instalment and thus asked for the claim to be rejected.

11. However, as a subidiary request, the Respondent asked for the claim to be only partially accepted holding the Respondent accountable to pay only the amount corresponding to the 24% tax withholding, i.e. EUR 10,560.

II. CONSIDERATIONS OF THE SINGLE JUDGE OF THE SUB-COMMITTEE OF THE DISPUTE RESOLUTION CHAMBER

1. First of all, the Single Judge of the sub-committee of the Dispute Resolution Chamber (hereinafter: the Single Judge) analysed whether he was competent to deal with the case at hand. In this respect, he took note that the present matter was submitted to FIFA on 29 January 2020 and the decision passed on 19 August 2020. Taking into account the wording of art. 21 of the June 2020 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), said edition of the Procedural Rules is applicable to the matter at hand (cf. article 21 of the Procedural Rules).

2. Subsequently, the Single Judge referred to art. 3 of the Procedural Rules, which states that the Dispute Resolution Chamber shall examine its jurisdiction in light of arts. 22 to 24 of the Regulations (August 2020 edition). In accordance with art. 3 of Annexe 6 in conjunction with art. 24 par. 3 and art. 22 lit. d) of the Regulations, on the Status and Transfer of (hereinafter: RSTP or regulations) Players the Single Judge is competent to decide on the present dispute relating to solidarity contribution between clubs belonging to different associations handled through TMS.

3. Furthermore, and taking into consideration that the player was registered with the Respondent on 5 August 2019, the Single Judge analysed which regulations should be applicable as to the substance of the matter. In this respect, he confirmed that, in accordance with art. 26 par. 1 and 2 of the Regulations, the June 2019 edition of the Regulations is applicable to the matter at hand as to the substance.

4. The competence of the Single Judge and the applicable regulations having been established, the Single Judge entered into the substance of the matter. The Single Judge started by acknowledging the above-mentioned facts of the case as well as the documentation on file. However, the Single Judge emphasized that in the following considerations he will refer only to the facts, arguments and documentary evidence which he considered pertinent for the assessment of the matter at hand. In particular, the Single Judge recalled that, in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the TMS.

5. First of all, the Single Judge noted that the Claimant was of the opinion that it was entitled to 40.41% of the solidarity contribution, i.e. EUR 44,451, taking into account that only the first instalment of the transfer agreement (cf. point I.3. above). The Single judge took notice that the Claimant acknowledged receipt of the payment received from the Respondent in the amount of EUR 33,440.

6. Moreover, the Single Judge duly noted that the Respondent rejected the Claimant’s claim, maintaining having complied with its obligation to pay solidarity contribution regarding the first instalment of the transfer fee with its payment of EUR 33,440, taking into account a deduction of 24% for taxes.

7. Having established the above, the Single judge referred to art. 21 of the Regulations in combination with art. 1 of Annexe 5 of the Regulations which stipulate that, if a professional moves during the course of a contract, 5% of any compensation, not including training compensation paid to his former club, shall be deducted from the total amount of this compensation and be distributed by the new club as a solidarity contribution to the club(s) involved in the training and education of the player in proportion of the number of years the player has been registered with the relevant club(s) between the seasons of his 12th and 23rd birthday.

8. In this respect, the Single Judge recalled that according to the player passport issued by the Country B Football Association, the player, born on 29 September 1995, was registered with the Claimant as from 1 August 2011 until 15 August 2015.

9. On account of the above and in accordance with art. 1 of Annexe 5 of the Regulations, the Single Judge considered that the Claimant would be entitled to receive solidarity contribution for the period as from 1 August 2011 until 15 August 2015.

10. As such, the Single judge observed that, in principle, the Claimant would be entitled to 40.41% of the 5% of any transfer of the player. In particular, the Single Judge recalled that, referring to the transfer agreement concluded between the former club and the Respondent, only the first instalment in the amount of EUR 2,200,000 had become due. Therefore, the Single Judge concluded that, in essence, the Claimant would be entitled to 40.41% of the 5% of EUR 2,200,000, i.e. EUR 44,451.

11. At this point, the Single judge recalled that during the proceedings the Claimant acknowledged receipt of the payment received from the Respondent in the amount of EUR 33,440, which shall be deducted from the Claimant’s entitlement. The Single judge concluded that the amount of EUR 11,011 remained outstanding.

12. As such, the Single Judge examined the Respondent’s arguments having been entitled to deduct such amount for tax reasons. In this regard, the Single judge emphasized that the Regulations do not provide for the possibility to deduct taxes from the payment of solidarity contribution. Moreover, as standard practice, FIFA’s deciding bodies are in principle not competent to deal with tax related issues. In this context, the Single judge had to reject the Respondent’s arguments.

13. As such, and in consideration of all the above, the Single Judge concluded that the Claimant is entitled to solidarity contribution in the amount of EUR 11,011, corresponding to the unpaid part of the solidarity contribution due to the Claimant regarding the first instalment. In view of the foregoing, the Single Judge decided to reject the Claimant’s claim for solidarity contribution.

14. Moreover, taking into consideration the Claimant’s claim as well as Regulations, the Single Judge decided that the Respondent has to pay, in conformity with its longstanding practice, interest of 5% p.a. over the amount payable as solidarity contributions as of the 31st day of the registration of the player with the Respondent on a definitive basis, i.e. as of 4 September 2019, until the date of effective payment.

15. In continuation, the Single Judge referred to art. 25 par. 2 of the Regulations in combination with art. 18 par. 1 of the Procedural Rules, according to which in the proceedings before the Dispute Resolution Chamber relating to disputes regarding training compensation, costs in the maximum amount of CHF 25,000 are levied. The costs are to be borne in consideration of the parties’ degree of success in the proceedings.

16. However, in this respect, the Single Judge referred to art. 18 par. 1. i. and ii. of the Procedural Rules and concluded that no procedural costs shall be levied.

17. Thereafter, taking into account the consideration under number II./3. above, the Single Judge referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

18. In this regard, the Single Judge pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

19. Therefore, bearing in mind the above, the Single Judge decided that, in the event that the Respondent does not pay the amount due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

20. Finally, the Single Judge recalled that the above-mentioned sanction will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

III. DECISION OF THE SINGLE JUDGE OF THE SUB-COMMITTEE OF THE DISPUTE RESOLUTION CHAMBER

1. The claim of the Claimant, B, is partially accepted.

2. The Respondent, C, has to pay to the Claimant, EUR 11,011 as solidarity contribution plus 5% interest p.a. as from 4 September 2019 until the date of effective payment.

3. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amount.

4. The Respondent shall provide evidence of payment of the due amount in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

5. In the event that the amount due, plus interest as established above is not paid by the Respondent within 45 days, as from the notification by the Claimant of the relevant bank details to the Respondent, the following consequences shall arise:

1.

The Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amount is paid.

(cf. art. 24bis of the Regulations on the Status and Transfer of Players).

2.

In the event that the payable amount as per in this decision is still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee.

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

NOTE RELATED TO THE APPEAL PROCEDURE:

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS) within 21 days of the notification of this decision.

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Procedural Rules).

CONTACT INFORMATION:

Fédération Internationale de Football Association

FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland

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