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French football clubs in strike threat over 75% tax

France’s top football clubs are threatening to go on strike in protest at the government’s plans to impose a 75 percent tax on them. Ligue 1 and 2 clubs are considering refusing to play fixtures scheduled for the weekend of October 26/27th, it emerged this week.

Published: 17 October 2013 10:49 CEST
French football clubs in strike threat over 75% tax
What happens next? PSG's galacticos Zlatan Ibrahimovic (L), Edison Cavani (C) and captain Thiago Silva (R). Will a strike by French clubs overturn a 75-percent tax on salaries? Photo: JS Evrard

The biggest football clubs in France are far from happy with the prospect of having to pay a 75-percent tax on the salaries of their millionaire players, it would seem.

The UCPF (Union of Professional Football Clubs), comprising France’s top two divisions, Ligue 1 and Ligue 2, this week threatened to go on strike against the ‘super-tax.’

The union’s executive committee agreed unanimously on Tuesday to protest in some way against the tax rate, which is set to be in force for 2014 and 2015, and therefore applied to earnings for 2013 and 2014.

“Everything is possible, tensions are very high,” Bernard Caïazzo, president of St. Etienne football club told Le Journal Du Dimanche (JDD).

Strike action could even take place as quickly as next weekend, according to sources cited by JDD. A proposal for Ligue 1 and Ligue 2 clubs to boycott fixtures over the weekend of October 26th gained significant support at Tuesday’s meeting.

The UCPF is set to meet on Thursday October 24th to finalize what form their protest will take, with France’s National Assembly scheduled to debate the new tax, beginning next week.

France’s sports minister Velerie Fourneyron confirmed in September that the country’s football clubs will not be exempt from the new 75 percent super tax.

The tax, one of President François Hollande’s flagship election proposals, is included in the government’s 2014 budget, but has not yet been approved by parliament.

Under the proposal, companies will be liable to pay the 75 tax rate for the portion of employees' salaries above €1 million annually.

And despite warnings from France’s football chiefs that the French top flight would be ruined if clubs had to pay the tax, Fourneyron insisted there will be no exceptions to the rule.

“There are no special measures. Football will be affected by the tax on high incomes,” the minister told Le Figaro at the time.

“Why should clubs be exempt from this tax?” she added.

SEE ALSO: France tops European league of millionaires

According to a study cited by Le Parisien on Thursday, French Ligue 1 clubs would be forced to shell out a combined total of €44 million under the 75-percent tax rule, on the million-euro salaries of 115 players and eight managers.

The level of contributions vary widely between clubs, with minnows Ajaccio and Guingamp, who have just one €1-million employee each paying €50,000, to champions Paris Saint-Germain, whose payroll includes 21 millionaires, including manager Laurent Blanc.

Under the planned tax scheme, PSG alone would pay a whopping €20 million extra in taxes.

Sports minister Fourneyron, however, did offer French clubs some comfort when confirming they would be liable to the 75-percent rate, announcing a cap on the tax.

The revenue from tax will be capped at 5 percent of turnover of clubs in order to reflect “the fragile economic model of football clubs”, she said at the time.

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REAL ESTATE

EXPLAINED: What’s happening to house prices and rents in Germany amid the coronavirus crisis?

There's an increased demand on the real estate market in Germany at the moment, and there's drama looming for tenants in Berlin. Here's a look at what's going on.

Published: 10 August 2020 11:17 CEST
Updated: 22 August 2020 12:59 CEST
EXPLAINED: What's happening to house prices and rents in Germany amid the coronavirus crisis?
Frankfurt am Main. Photo: DPA

Ever dream of owning your own home in Germany? Well, sadly, it has become more expensive since the beginning of the pandemic.

In the second quarter (April to June), condominiums were on average 1.3 percent more expensive than at the beginning of the year. Compared to the second quarter of 2019, the increase was 5.9 percent. That's according to Research and Consulting Company for Housing, Real Estate and the Environment (F+B), which Spiegel reported on Monday.

Surprisingly, the price increase for single and two-family houses was even higher than that of apartments. Compared to the previous quarter, the prices of houses increased by 2.9 percent – and even by nine percent year-on-year.

This is unusual because prices for condos in Germany have almost always risen much faster than those for houses over the past 10 years.

Experts said more people are choosing to buy homes in Germany.

“In view of historically unparalleled low lending rates, it seems to be more economical for many buyers to invest in owner-occupied properties instead of renting,” said F+B Managing Director Bernd Leutner.

READ ALSO: Housing in Germany – here's where demand and prices are soaring

It is not known for definite whether the sharp rise in the price of single-family homes is due to increased demand resulting from the coronavirus crisis, for example because families are looking for more space and gardens – but it could be a factor.

The F+B Residential Index measures the rent and price developments on the German real estate market. The index is based on the supply data of more than 30 million properties throughout Germany.

What's happening to rent?

Unlike homes, rents have hardly risen at all in the past two years. Even in the second quarter, there was only a minimal increase in new contract rents, researchers found. Compared to the previous quarter, rents rose by 0.4 percent and by one percent year-on-year.

Rents for existing properties rose by 1.3 per cent year-on-year. “On a national average, the increase in rents is therefore manageable,” said Leutner.

Berlin tenants face paying back millions of euros

There could be major problems looming for Berlin tenants

The controversial rent freeze came into force on February 23rd this year which resulted in lower rents for many tenants. But experts say it could be overturned at any moment, leaving tenants liable to pay pack the difference.

The core issue being debated in courts is whether the state of Berlin is allowed to legislate in this area.


Housing in Berlin. Photo: DPA

If the Constitutional Court overturns the rent cap, many tenants in Berlin will face paying back huge amounts, according to F+B.

Due to the still unclear legal situation, there is currently a split rental market in the city. There are “shadow rents”, i.e. “the market rents”, which are usually higher than the price of the rent cap.

And on the other hand, there's the “official” rent costs corresponding to the rental price cap. The research company analysed the advertised rental apartments before and after the law came into force and “observed the existence of two rent indications in one and the same apartment advertisement”.

READ ALSO: Berlin's district court rules in favour of rental price cap

This is often associated with the remark that “the landlord reserves the right to retroactively claim the difference between the rent cover rent and the market rent”. The tenant has to agree to this in the rental contract.

SEE ALSO: The complete guide to how you can (still) live cheaply in Berlin

According to F+B the difference is clear to see: for 3,133 apartments offered between February 23rd 2020 and June 30th, F+B assumes a capped average rent of €7.05 per square meter

However, the market rent for the apartments is an average of €13.63 per square metre – a difference of €6.58 per square metre. With an average apartment size of 60 square metres, this would mean a total difference of €1.2 million per month which tenants would have to cough up.

“The longer the decision drags on, the greater the threatening additional claims,” says F+B managing director Leutner. At the same time, the massive difference in costs shows the advantages of the new rent freeze for tenants.

In any case, a quick clarification would be in the interest of all parties involved, said the research firm.

READ ALSO: 'We're setting a clear stop sign': Berlin passes five-year rent freeze law

Despite receiving the support of Berlin's state parliament, the law is opposed by Germany's federal government which argues that regulating housing costs is a federal rather than a state matter.

 

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