To lure FIFA, France announces the promise of a tax-free house

Call it a friendship with extremely generous benefits.

French lawmakers will vote on Wednesday on a plan promoted by President Emmanuel Macron’s government that would encourage international sports organizations to move to the country by promising them what critics have called a “tax gift” unavailable to most French companies and citizens.

The plan, offered as an amendment to the state’s 2024 budget, would reward organizations that relocate by exempting them and their employees from a wide range of corporate, property and income taxes — savings that could be worth millions of dollars each year.

Potential beneficiaries include the governing bodies of a wide range of sports, including more than 30 international federations recognized by the International Olympic Committee. But both supporters and opponents of the tax breaks said they were intended to entice one governing body in particular: FIFA.

FIFA, the governing body of world football, has been based in Zurich since 1932. But in recent years, FIFA’s leadership has talked about moving to greener pastures amid frustrations with life in Switzerland, which was not only the site of its growth into a multi-billion-dollar commercial juggernaut, but also its biggest scandal.

France is aware of this dissatisfaction at the highest level and hopes to bring FIFA – which was founded in Paris in 1904 – home.

The French politicians who drafted the tax plan said they hoped it would entice governing bodies by offering them the kind of tax breaks previously available in some European countries outside Switzerland. Under the proposal, organizations that relocate would be exempt from corporate taxes, local property taxes and even levies on part of their income. The executives and employees who come along would be exempt from income tax for at least five years.

“We cannot be blind to the FIFA issue,” said Mathieu Lefèvre, a deputy of Renaissance, the political party founded by Macron, and a signatory of the amendment that Parliament will vote on Wednesday. “FIFA is very important.”

The amendment granting favorable tax status to sports federations, Mr Lefèvre said, is similar to other recent pro-business changes implemented by the French government, including attempts to lure some major banks from London to Paris after Britain voted to to leave the European Union. in 2016. “We want to make France great again,” Mr. Lefèvre said.

Like some other measures criticized for favoring businesses over workers – most notably changes this year to France’s pension system, which raised the country’s retirement age – the push to attract sports federations through tax breaks does not enjoy universal support. The Senate, the upper house of the French parliament, recently voted to remove the text regarding sports federations from the government’s budget document.

“The words of the senators were quite strong, with everyone thinking that it was some kind of scandal, nonsense, that it was something that really didn’t need to happen,” said Jean-Claude Raux, an opposition lawmaker. But in a sign of their commitment to the amendment, lawmakers reworked the measure to ensure its inclusion.

French Sports Minister Amélie Oudéa-Castéra was grilled by lawmakers during a recent hearing. defended the bill, rejecting claims that it amounted to a “tax gift” to sports federations. Instead, she said, the law would simply place international sports federations within a framework that France’s other international organizations already enjoy.

But unlike these bodies, including UNESCO, the United Nations cultural organization, FIFA is a behemoth with almost 2,000 staff, global commercial interests and billions in revenue. It was recently estimated that the four-year cycle leading up to the 2026 World Cup in North America, for example, would generate $11 billion in revenue.

French politicians, including Ms Oudéa-Castéra, have been at pains to point out that the tax breaks would be limited to FIFA’s non-commercial activities, the parts of the organization responsible for governing and developing football across the world world. But it is unclear how France wants to make that distinction.

FIFA declined to comment on the proposed changes. But under President Gianni Infantino, efforts to move some key operations out of the glass-and-steel headquarters in Zurich have accelerated in recent months. FIFA has already said it will move most of its legal department to Miami. And it has opened satellite offices in South America, Africa and Asia as part of Mr Infantino’s oft-quoted ambition to make FIFA “truly global”.

Mr Infantino could be one of the most prominent beneficiaries of the proposed income tax exemption: his pre-tax salary and bonus package totaled $3.9 million, according to FIFA’s latest accounts. He also oversaw the opening of another FIFA outpost in Paris, in 2021. The FIFA pied-à-terre in the French capital, in the opulent Hôtel de la Marine, includes an office reserved for Mr Infantino with stunning views some of the city’s most popular sights, including the Eiffel Tower. Currently, the FIFA department responsible for global football development is located here.

Mr Lefèvre, the lawmaker, said attracting FIFA would be a coup for France’s global image. Others were less exuberant about the implications of the association.

Mr Infantino was only elevated to FIFA’s top leadership after a corruption scandal in 2015 led to the downfall of the previous leadership. Since then he has spoken frequently and emphatically about a reformed organization. However, recent decisions have prompted renewed scrutiny into the way FIFA conducts business. A recent change in the organization’s rules will theoretically allow Infantino to remain in power for more than 12 years. Another country sent the hosting rights for the 2034 World Cup to Saudi Arabia, surprising some of FIFA’s own member states.

Belkhir Belhaddad, a French lawmaker who opposes the tax change, said FIFA’s activities should be subject to greater scrutiny if the changes are approved.

“These sports organizations are important, they are useful, they have economic, financial and social relevance,” Mr Belhaddad said. “In the world we live in today, we need them. But they need to be regulated. How do we do it? Who will take care of it?”

The proposals for a new tax status specifically for international sports organizations also received a negative assessment from the Conseil d’État, France’s highest administrative court, which received a draft version in September. The court issued a negative opinion on the grounds that such a move constituted a “violation of tax equality,” according to news reports in France.