WRITTEN QUESTION E-3327/02

by Toine Manders (ELDR) to the Commission

(25 November 2002)

Subject: European football finals

The Netherlands is in danger of missing out on major large-scale international sporting events as a result of stringent financial regulations (De Volkskrant, 8 November 2002). UEFA has said that it will not for the time being be holding football finals in the Netherlands.

The performing artists and professional athletes regulation provides that foreign sportsmen must pay income tax in respect of sporting activities they engage in in the Netherlands. Apart from salaries and bonuses, the revenue from sale of television rights by the foreign club or league will, for example, be regarded as taxable income. Revenue from sales of television rights is in fact a major source of income for clubs and leagues, and does not go to players. Inquiries have shown that fiscal arrangements in other Member States are less strict.

Given that football matches can be regarded as services, the actions of the Netherlands revenue department seem to me to obstruct the freedom to provide services, and hence the single market. The role of UEFA in the allocation of European football finals also prompts some questions, not least because of its monopoly position.

This situation is undesirable from both the financial and economic and the social and cultural points of view.

1. Is the Commission aware of the above situation?

2. Does the Commission take the view that UEFA, as the organiser of events of this kind, could abuse its monopoly position in allocating European football finals in Europe?

3. Does the Commission take the view that the actions of the Netherlands revenue department constitute an obstacle to the freedom to provide services, and hence to the single market?

4. Is the Commission prepared to take action to deal with the above situation by eliminating this distortion of the single market and, if so, what action?

Answer given by Mr Bolkestein on behalf of the Commission

(9 January 2003)

The Commission is aware of the situation described by the Honourable Member.

The Union of European Football Associations (UEFA), as the governing body of football on the continent of Europe, has the ability to decide where finals of the European football championships that it organises are to be held, and the straightforward exercise of that right could not constitute an abuse of a dominant position contrary to Article 82 of the EC Treaty, unless it were shown to be clearly discriminatory and incapable of objective justification.

Under the current state of Community law, direct taxation falls essentially within the competence of Member States. In the exercise of this competence, Member States have to respect their obligations under the EC Treaty. It is for the Member States to design their national tax system with all its features (rates, exemptions etc), as long as they do not discriminate on the basis of nationality or install or maintain discriminations of nationals of other Member States who exercise their freedoms provided for in the EC Treaty or apply unjustified or disproportionate restrictions to the freedoms of the EC Treaty. In general, the Commission does not consider differences in the level of taxation between Member States to constitute a restriction of the freedoms which is, as such, contrary to the EC Treaty. More particularly, the discription given by the Honourable Member of the taxation of revenue from sale of television rights in the Netherlands does not lead the Commission to conclude that there is an infringement of Community law.

According to the information available to the Commission, the Netherlands' tax rules on the taxation of foreign performing artists and professional athletes do not infringe the freedoms provided for by the EC Treaty either.