Many players at the FIFA Women’s World Cup have been left out of pocket by a tax exemption deal that penalised teams drawn to play in Australia instead of New Zealand.
An investigation by UK’s Guardian has revealed FIFA struck tax deals for itself and its wholly-owned tournament entity (FWC2023 Pty Ltd) in Australia and New Zealand but ‘goofed’ by not getting an exemption on earnings by players in Australia.
Players in Australia have been forced to pay 32.5% of their match fees to the Australian Tax Office (ATO).
Those whose games were in New Zealand, including the Football Ferns, were exempted from paying tax to the Inland Revenue Department (IRD).
Those who played games in both host countries — such as the United States and winners Spain — faced withholding tax payments on a pro-rata basis for their appearances in Australia.
The Guardian reports FIFA negotiated an eight-and-a-half year tax exemption for itself and its subsidiary in Australia, but was turned down in its efforts to claim exemptions for player fees.
This was in contrast with the deal struck with the NZ IRD in which FIFA and all players were exempted from paying tax.
Co-chief executive of Professional Footballers Australia, Kathryn Gill, told the Guardian: “While taxation law is complex, the principle of equal and fair remuneration isn’t.
“Given FIFA was able to negotiate withholding tax exemptions with the Australian government to their benefit, it is puzzling that this wasn’t extended to the very people who helped to generate the tournament’s revenues.
“In adopting this approach, the players have been left to shoulder the burden, unlike FIFA who have sought to be the beneficiaries.”
Squads whose players face heavy tax bills included:
Players from Nigeria, one of the teams to play all their games on Australian soil, paid $17,500 of their $60,000 fees in tax to the ATO.
South African players copped a double tax blow — they paid tax on a pro-rata basis for their games in Australia, and then faced a deduction charged by the South African Revenue Service (SARS) as well.
A Nigerian official told Guardian writer Osasu Obayiuwana:
“FIFA goofed … and players at the same tournament are being taxed differently
“This is a huge amount of money for players to lose. FIFA, the so-called apostle of fair play, did not apply financial fair play to the teams in Australia.”
Ferns avoid tax payments
Under FIFA’s tournament payments schedule, the 23 players to represent New Zealand were expected to receive $49,000 each from the prize pool.
These fees should be tax-free under the agreement between FIFA and the IRD.