FC Barcelona and Real Madrid must repay state aid

The European Court of Justice, the highest court in the bloc,  on Thursday  ruled that the state aid was an abuse of competition law. The European Commission had been pursuing this ruling through the courts for more than five years.

The high court overruled a 2019 decision brought by the Luxembourg-based General Court that found the four clubs’ tax regime was lawful. In February 2019, the four clubs received a financial boost after the General Court of the European Union overturned the earlier ruling from the European Commission concerning state aid.

That ruling would have meant the four clubs no longer had to pay back taxes that could have amounted to up to €5m ($6m) each. The case dated back to a 2016 ruling from the Commission.

It is an important win for the Commission, which had lost a headline case of the same type against Apple last year.

Barcelona, Real, Athletic and Osasuna claimed the status of non-profit organisations, and their income was taxed at a lower rate than other football clubs.  was, until 2016, lower than the rate applicable to SPLCs.

In its 2016 decision, the Commission declared that Spain had unlawfully implemented state aid in the form of a corporation tax privilege in favour of the four clubs. The football clubs took that decision to the courts.

In its judgement in February 2019, the Court said the Commission made several mistakes in assessing the case and used figures that only covered four tax years, while the scheme operated from 1990 to 2015.

However, the Court of Justice ruled that the 2019 judgement was not viable, and said action brought by Barcelona is “definitively rejected”.