F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2019-2020) – fifa.com – atto non ufficiale – Decision 28 January 2020

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 28 January 2020,

by

Geoff Thompson (England)

Single Judge of the Players’ Status Committee,

on the claim presented by the coach

Fedele Limone, Italy,

represented by Mr Luca A. Perdomi & Mr Simone Carrea,

as “Claimant”

against the club

PFC Levski Sofia, Bulgaria,

represented by Mr Ivaylo Ivkov,

as “Respondent”

regarding a contractual dispute arisen between the parties

I. Facts of the case

1. On 8 August 2017, the Italian coach, Mr Fedele Limone (hereinafter: the coach or the Claimant) concluded an employment contract (hereinafter: the contract) as “Assistant Coach” with the Bulgarian club, PFC Levski Sofia (hereinafter: the club or the Respondent), valid, following its clause 2.1, as from the date of signature until 30 June 2019.

2. Clause 3 of the contract stipulated the following:

"3. Remuneration:

3.1. The basic employment remuneration for the competition year of 2017/2018 and 2018/2019 in the amount of €75 000 (seventy five thousand euro) net of Bulgarian and/or Italian taxes and social security contributions for each season shall be due as follows:

3.1.1. For sport season 2017/2018 eleven monthly employment remuneration in the amount of 6 818,18 (six thousand eight hundred and eighteen euro and 18 cents euro) net, payable by the 20 date of the month, following the month for which the same are due.

3.1.2. For sport season 2018/2019 twelve monthly employment remuneration in the amount of 6 250,00 euro net, payable by the 20 date of the month, following the month for which the same are due. [...]

3.6. All fees, charges, taxes and national insurance payments that incur in Bulgaria and/or Italy in relation to this Contract (salary and bonuses included) shall be paid by the Club and/or refunded by Club to the Coach if it had previously been due and/or paid by the Coach.

3.7 All fees, charges, taxes and national insurance payments that might need to be paid in Italy should be paid by the club to the coach no later than 28 February following the previous fiscal year end, according to an estimation of the due amounts."

3. On 25 July 2018, the parties concluded a mutual termination agreement, valid with immediate effect.

4. In this respect, art. 2 of the aforementioned agreement stipulated the following:

“The Club undertakes to pay the Coach the outstanding monthly remunerations for the months of May 2018 and June 2018 in the total amount of EUR 13 626.11 net (…) no later than 27.07.2018, together with a total amount of EUR 18 750 (…) as a compensation in the following manner:

2.1. EUR 6 250 (…) payable on 15 August 2018;

2.2. EUR 6 250 (…) payable on 15 September 2018;

2.3. EUR 6 250 (…) payable 15 October 2018.”

5. Moreover, art. 3 of the mutual termination agreement stipulated the following:

“The Club declares that it will uphold the above-mentioned obligations as well as the obligations of Art. 3.6 of Employment contract Nº 5 dated 08.08.2017 and "Annex I to the Employment Contract of 8.8.2017" and attached annexes. The due taxes for 2017 will be paid by 20.08.2018 and the due taxes for 2018 will be paid by 28 February 2019.”

6. On 2 January 2019, the coach sent a default notice to the club, underlining that the club failed to pay the of EUR 12,500, corresponding to the second and third instalment agreed upon in the termination agreement as well as the “due taxes concerning 2017, which should have been paid within 20th August 2018”.

7. On 1 April 2019, the coach sent a new default notice to the club, enclosing a calculation.

8. On 7 May 2019, the club replied to the coach with, inter alia, the following:

“In accordance with the termination agreements our club also took commitment to pay the due taxes for 2017 and 2018. In that regard I would like to notify you that PFC Levski has paid all the taxes that were due in Bulgaria in accordance with the Bulgarian law. As far as any other taxes might be concerned, such shall not be due, as pursuant to the Agreement between (…) Bulgaria and (…) Italy on the avoidance of double taxation.”

9. On 13 May 2019, the coach sent a new notice to the player stating, inter alia, that “contrary to what you argued (...), taxes in Italy are actually due.”

10. On 28 August 2019, the coach lodged a claim before FIFA for outstanding remuneration only, and requested the payment of the following amounts:

- EUR 11,051 “of which € 1.105,00 in Bulgarian taxes” as outstanding remuneration due for the year 2017, as well as 5% interest per year on said amount as from 20 August 2018;

- EUR 30,283.63 “of which € 3,0285.86 in Bulgarian taxes” as outstanding remuneration due for the year 2018, as well as 5% interest per year on said amount as from 28 February 2019.

11. In addition, the coach requested the payment of the procedural costs.

12. In its reply, the club considered that it is undisputable that the Club has already paid the Coach all the agreed net remuneration, together with the due taxes in Republic of Bulgaria, and that consequently, he only requests to be paid with taxes allegedly due in Italy.

13. Based on the above and the substance of the claim filed by Mr Botticella in front of the PSC, the present dispute cannot be defined as an employment-related one by the means of art. 22 lit. c) of the RSTP.

14. The club wished to emphasize that it does not reject the jurisdiction of the PSC in general, but only that it we believes that such is reserved for contractual disputes that are connected to the employment relationship between the coach and the club and are therefore employment disputes. In the opinion of the club, the present case is solely a tax matter and is not connected in any way to the rights and the obligations of the parties to the contract.

15. The club further added that the due taxes on the remuneration received by the Claimant from the Respondent in accordance with the Bulgarian tax legislation have been paid as well and this fact is also not denied by the Coach.

16. The club considered that the material law applicable to the present matter is the Convention between the Republic of Italy and People’s Republic of Bulgaria for avoidance of double taxation with respect to taxes on income and property and for the prevention on tax evasion from 1988, in force in Republic of Bulgaria from 1991. More specifically, the club quoted art. 15 par. 1 of said Convention, according to which “income, which a local resident of a Contracting State receives from his personal activities exercised in the other Contracting State (those can be, for example, the activities of an artist in a performance, or theatre artist, cinema artist, radio or television artist, or of musicians or sportsmen) must be taxed in this other Contracting State.”

17. As a result, the club considered that the income of the coach shall be subject to taxes only in Bulgaria.

18. Moreover, the club underlined that the monetary amount of the claim of the coach is based on various calculations but that, however, not a single legal basis in support of any of those calculations is presented. The club highlighted that the coach does not quote or refer to any relevant texts from the Italian tax law that he apparently deems is applicable.

19. The club therefore considered that the claim of the coach is unjustified also because “not a single proof has been presented that he has in fact either paid the claimed taxes or that at least that he has been officially invited to do so by the Italian tax authorities.”

20. The club further noted that, in its opinion, the termination agreement between the parties settles all previous financial relationships and cancels all other agreements made beforehand.

II. Considerations of the Single Judge of the Players’ Status Committee

1. First of all, the Single Judge analysed whether he was competent to deal with the case at hand. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the Single Judge referred to art. 3 par. 1 and 2 of the Procedural Rules and confirmed that in accordance with art. 23 par. 1 and 4 in combination with art. 22 lit. c) of the June 2019 edition of the Regulations on the Status and Transfer of Players, he shall, in principle, adjudicate on an employment-related dispute involving a Italian coach and a Bulgarian club.

3. However, the Single Judge acknowledged Respondent’s opinion that the present dispute cannot be defined as an employment-related dispute by the means of art. 22 lit. c) of the Regulations on the Status and Transfer of Players.

4. In this regard, the Single Judge noted that the Respondent did not reject the jurisdiction of the Single Judge of the Players’ Status Committee in general, but it believes that such is reserved for contractual disputes that are connected stricto sensu to the employment relationship between the coach and the club and are therefore employment disputes. In the opinion of the club, the present case is solely a tax matter and therefore not connected to the rights and the obligations of the parties to the contract.

5. For the sake of clarity, the Single Judge first of all wished to stress that FIFA’s deciding bodies are in principle not competent to deal with tax relate disputes, as they fall outside the scope of the Regulations and Procedural Rules.

6. However, the Single Judge observed that the claim of the Claimant in relation to the taxes appears to be contractually grounded.

7. In particular, the Single Judge observed that the contract concluded between the parties stated, inter alia, the following:

“3.6. All fees, charges, taxes and national insurance payments that incur in Bulgaria and/or Italy in relation to this Contract (salary and bonuses included) shall be paid by the Club and/or refunded by Club to the Coach if it had previously been due and/or paid by the Coach.”

8. As a result, the Single Judge observed that the Claimant requested an amount corresponding to taxes to be paid by the Claimant in the scope of his contractual relationship with the Respondent.

9. In particular, the Single Judge acknowledged that the Claimant counts with enough legal basis to request taxes allegedly payable in Italy as the mutual termination agreement, as well as the employment contract clearly state that the Claimant is entitled to certain amounts to be paid by the Respondent as taxes.

10. In view of the above, the Single Judge understood that this matter, although referring to taxation, is in fact a contractual dispute, insofar the legal matter to be analyzed is to establish whether the coach should have received his remuneration in net.

11. Having established the foregoing, the Single Judge deemed that the club’s objection to the competence of FIFA to deal with the present matter has to be rejected and it is competent on the basis of art. 22 lit. c) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

12. Subsequently, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, he referred, on the one hand, to art. 26 par. 1 and 2 of the June 2019, October 2019 and January 2020 editions of the Regulations on the Status and Transfer of Players, and on the other hand, to the fact that the present claim was lodged with FIFA on 28 August 2019. In view of the foregoing, the Single Judge concluded that the June 2019 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand as to the substance (cf. art. 26 par. 1 and 2 of the Regulations).

13. His competence and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge started his analysis by acknowledging the facts of the case and the arguments of the parties as well as the documents contained in the file. The Single Judge, however, emphasised 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.

14. In this respect and first of all, the Single Judge acknowledged that the Claimant and the Respondent had concluded an employment contract valid as of 8 August 2017 until 30 June 2019.

15. Furthermore, the Single Judge took note that on 25 July 2018, the Claimant and the Respondent concluded a mutual termination agreement, stipulating that the Respondent has to pay to the Claimant outstanding monthly remunerations. Moreover, the Single Judge observed that the Respondent also declared to uphold the obligations as established in the employment contract, regarding the payment of taxes as follows: (i) “for 2017 will be paid by 20.08.2018”; (ii) “for 2018 will be paid by 28 February 2019”.

16. In these circumstances, the Single Judge decided that the termination agreement concluded between the Parties was the sole binding document to take into account in the context of the present dispute.

17. In addition, the Single Judge took note that the Claimant acknowledged that “the Club (a) has already paid to the Coach the agreed net remuneration […].“

18. Furthermore, the Single Judge noted that according to the Claimant, the Club “(b) claims to have paid “all the taxes that were due in Bulgaria in accordance with Bulgarian law”; (c) only refuses to pay taxes due in Italy […].”

19. In this context, the Single Judge observed that art. 3 of the mutual termination agreement upheld article 3.6 of the employment contract, which stipulated the following: “All fees, charges, taxes and national insurance payments that incur in Bulgaria and/or Italy in relation to this Contract (salary and bonuses included) shall be paid by the Club and/or refunded by Club to the Coach if it had previously been due and/or paid by the Coach.”

20. The Single Judge equally acknowledged the Respondent’s reply, according to which it had strictly complied with all its obligations arising out of the contract. Furthermore, the Single Judge took note that the Respondent paid the Coach all the agreed net remuneration, together with the due taxes in the Republic of Bulgaria.

21. Taking the above into consideration, the Single Judge concluded that the subject of discussion in the present case are merely taxes payable in Italy. In this regard, the Single Judge pointed out that in accordance with both the termination agreement and the contract, the condition for any amount to be paid by the Respondent to the Claimant, must have been first due and/or paid by the Claimant.

22. In this respect, the Single Judge acknowledged the Respondent’s position that “not a single proof has been presented that he has in fact either paid the claimed taxes or that at least that he has been officially invited to do so by the Italian tax authorities.”

23. Having said this, the Single Judge proceeded with an analysis of the evidence provided by the Claimant, bearing in mind art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof.

24. In this context, the Single Judge concluded that the Claimant failed to prove that he paid any amount before the Italian tax authorities corresponding to taxes or, at least, that the Italian tax authorities requested the Claimant to proceed with any such payment; circumstances (separate or joint) which must have occurred in order for the Claimant to be entitled to request any amount with that consideration from the Respondent.

25. Furthermore, the Single Judge was of the opinion that if the Claimant was in need of certain documentation in order to prove that he had already paid taxes in Italy in connection with his earnings, it was his responsibility to obtain such documentation. Moreover, the Single Judge recalled that the Claimant recognised having received the agreed net amount.

26. Accordingly, and in view of the all the above considerations and circumstances, the Single Judge decided that the claim of EUR 41,283.63, corresponding to the taxes allegedly payable by the Claimant in Italy, must be rejected.

27. The Single Judge concluded its deliberations by rejecting any claim for legal expenses and procedural compensation in accordance with art. 18 par. 4 of the Procedural Rules and the respective longstanding jurisprudence in this regard.

28. In this respect, the Single Judge highlighted that the claim was rejected and that the Claimant was the party at fault. Therefore, the Single Judge decided that the Claimant has to bear the costs of the current proceedings in front of FIFA.

29. Furthermore and according to Annexe A of the Procedural Rules, the costs of the proceedings are to be levied on the basis of the amount in dispute. Consequently and taking into account that the total amount at dispute in the present matter is lower than CHF 50,000, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 5,000.

30. In conclusion and considering the specific circumstances of the case, the Single Judge determined the costs of the current proceedings to the amount of CHF 3,000.

31. Consequently, the Claimant has to pay the amount of CHF 3,000 in order to cover the costs of the present proceedings.

III. Decision of the Single Judge of the Players’ Status Committee

1. The claim of the Claimant, Mr Fedele Limone, is admissible.

2. The claim of the Claimant is rejected.

3. The costs of the proceedings in the amount of CHF 3,000 are to be paid by the Claimant. Given that the latter already paid an advance of costs of CHF 1,000 at the beginning of the present proceedings, the Claimant has to pay the amount of CHF 2,000 to the following bank account with reference to case nr. 19-01774/pas:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

*****

Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the DRC. Where such decisions contain confidential information, 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 Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

Note related to the appeal procedure:

According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS.

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the Single Judge of the

Players’ Status Committee

Emilio García Silvero

Chief Legal & Compliance Officer