FIFA World Cup & Taxes

Jul 01, 2014

brasilThere is no doubt that World Cup fever has started to spread with Team USA advancing to Round 16 of the 2014 FIFA World Cup. So many have wondered….what is FIFA and who gets the money from all of these events?

FIFA, or the Federation Internationale de Football Association, is the international governing body of soccer, or football as it is called in all countries other than the United States. The association is governed by Swiss law, founded in 1904 and is based in Zurich. It has 209 member associations, all focusing on the same goal of constantly improving football. FIFA currently has over 310 employees from over 35 countries. FIFA is managed centrally and run similarly to our own government, with a Congress (legislative body), Executive Committee (executive body), General Secretariat (administrative body) and numerous committees that assist the Executive Committee. The Congress generally passes laws that help govern the organization and also approves the annual report.

Team USA was one of only 32 teams to earn a coveted spot in the World Cup. They competed against over 209 teams across the world to earn their trip to Brazil in 2014. Worldwide over 3.7 billion people watched the 1998 World Cup that was held in France.

With all of these countries competing, it can be safe to say that FIFA earns a tremendous amount of money. The majority of FIFA’s income is directly correlated to events like the World Cup. It is expected that the 2014 World Cup will bring in over USD $5 billion, which a majority will come from the sale of TV and marketing rights. In addition, expenses related to the cost of operating the World Cup in 2014 are estimated to be around USD $2 billion, and about half of this will be going directly into the Brazilian economy.

FIFA is organized as a not-for-profit association under Swiss law; therefore, no tax is paid in Switzerland on revenues earned from the World Cup, and other commercial income. FIFA works to obtain various tax exemptions from the World Cup, and Brazil is no exception. There have been large debates over whether these tax exemptions actually are harmful to the host countries economy or beneficial. One can argue that the money spent in Brazil on building stadiums would be better served constructing schools or houses, while opponents can dispute that Brazil will actually make more money through tourism than it will forgo in tax dollars. In addition, all prize money earned in the World Cup will be taxable to Brazil, which is expected to amount to approximately USD $576.

No matter which side of the debate you are on, one thing about the World Cup holds true; countries around the world become unified cheering for both the players and the game.

Go Team USA!!!

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