Tax department
Alliance Soccer Consulting has introduced in its team a tax lawyer to support you in your tax matters as well as to advise you in this technical field which purpose is to improve your career's financial management.
Discover hereby the main tax regimes applicable to professional players, whether they are employees of a club or independents.
1. The player: employee of a french club
When a employment contract is signed between a player and his club, a subordination link is made: the club becomes the employer of the player.
The income then perceived by the player for his activity within the club is therefore a salary.
A standard deduction of 10% for professional fees applies on the yearly net salary of the professional player. However, this deduction is limited to 12.627€ for the year 2019.
Example : a player has 45.000 € of net salary in 2019. The standard deduction of 10 % equals 4.500€. The net taxable salary then amounts to 40.500€.
The player can also opt for a deduction of his professional "real" fees: i.e. by deducting professional fees effectively paid during the taxation year. However, this method requires that the player shall keep the whole supporting bills of his deductible fees. Moreover, he must be able to prove that engaged fees are linked to the nature and importance of all the transactions in compliance with its professional obligations.
The net taxable salary then computed, after the deduction of professional fees, is added to other taxable incomes of the player and is taxable according to thegraduated scale of the income tax (in opposit of dividend incomes for example, that are taxable to a flat tax of 30%).
The tax regime of a professional player being an employee is then simple thanks to the existence of the standard deduction of 10%.
There is a very attractive regime for the players (i) that have not been French tax resident in a continuous manner throughout the five civil years preceding their arrival in France and (ii) who fix their tax residence in France from the date of their arrival.
That regime, known as impatriation, allows players to exempt some of their incomes:
- the impatriation bonus is fully exempted (either to the real and in this case it is important to determine and distinguish the bonus from the salary within the working contract before any office taking in France ; either on option while considering that this bonus corresponds to 30 % of the total net remuneration perceived throughout the year by the player), however there is a limitation to this deduction that has to be computed with your tax lawyer;
- The part of the remuneration corresponding to the activity carried out abroad (to the condition that this activity be realized in the direct and exclusive interest of the club which is the employer) who is partially exempted of income tax ;
- an exemption of 50% on dividendes, interest and capital gain on portfolios foreign sources (under some conditions).
This impatriation regime is granted in respect of the years of tax residency in Franceuntil December 31st of the eighth civil year following the one of the office taking in France ; unless the player changes of employer during that period if time.
2. The independent player
The player can acts as a professional independent. In this case, he will be able to practice as an individual entrepreneur and benefit from the regime of micro-entrepreneur (very simple regime) or practice via an EURL type of structure from which perceived income will be taxed at the income tax in respect of the non-commercial profits (BNC).
The BNC real regime needs keep proper accounts. The need for an accountant is then highly recommended. Services performed must be submitted to the VAT (unless the player is in a VAT exemption case).
This regime allows to deduct a certain amount of charges that an employee could not deduct. This can be attractive for the highest paid players. Moreover, it is possible to straighten over several years the yearly income derived from the professional player's activity thanks to the application of an average on the two or four previous years. This straightening allows to reduce the tax amount by switching from tax bracket of the graduated scale. We recommend you to contact us in order to determine the opportunity to apply this technical regime called regime of the article 100 bis.
The description of the BNC regime is only a brief summary and is far from being exhaustive, it is complex but this can be very attractive if the structure settled is adapted to the needs of each one. Contact us for more information and be advised bu a tax lawyer on these matters.
The professional player can practice his activity through a company. That is to say that his company becomes service provider to the club and a contract is then concluded between the club and the player's company. This prestation will be submitted to the VAT, it will then be required to add 20 % on the amount charged.
The player can pay himself in various ways via his company: either by being employed by his company (in that case, the same regime as a player employed by a club then apply), either he pays himself as a director/president of his company (the appplicable fiscal regime will then depend on the legal status of the company ; SARL or SAS for example), either he pays himself in dividends that are taxed at 30% no matter the amount of dividends distributed. The dividends solution is interesting for the highest paid players. The determination of the best remuneration system requires to involve a tax lawyer, because once again, the situation of each one is different (existence of other incomes within the tax unit, needs in social protections that can vary from an individual to another, the need to contribute to the retirement pension...).
A company subject to corporate income tax requires to keep proper accounts, it is then highly recommended to involve an accountant to that end. The advantage of such a structure will be to be able to deduct more charges than with an employee status.
The description of companies regimes is only a brief summary and is far from being exhaustive. To sum up, the implementation of such a company is complex, but that can be very attractive if the established structure is adapted to the needs of each one. Contact us for more information and obtain advice from a tax lawyer on that matter.
3. Incomes derived from the exploitation of a player's image
Incomes derived from the image exploitation of the player can be taxed at the personal income tax or at corporate tax if the concerned rights are exploited via a company at the corporate tax.
Once the professional player starts to perceive incomes derived from the exploitation of his image, it is highly recommended to take advice from a specialist in order to structure right from the beginning, such incomes that can explode very quickly.
4. Bespoke solutions
It happens that the international career of some players requires the implementation of bespoke structures in order to guarantee a legal and tax security for their incomes.
However, that structures are specific to the situation of each player and are then confidential.
Don't hesitate to contact us for more information on that matter.