Dfb must pay 19.2 million in back taxes in wm affair

Dfb must pay 19.2 million in back taxes in wm affair

The german soccer association has to pay back taxes of 19.2 million euros in the world cup affair. The association announced this on friday.

The frankfurt am main tax office served the DFB with a revised tax assessment for 2006 on wednesday and also wants to revoke its charitable status for the world cup year. However, the DFB’s top management has announced that it will appeal this decision. "We will of course do our duty and pay first, but we will appeal and in case of doubt we will sue because we assume that the expenditure that has been made is an operating expense," DFB president reinhard grindel told TV station sky.

The association first admitted the threat of additional payments in july when it presented its financial report. Measured against a turnover of around 305 million euros, a sum of 19 million euros for the world’s largest sports federation seems manageable.

But the handling of the world cup affair comes at a time when the DFB is facing massive investment in its 145 million euro academy. The association only closed the 2016 fiscal year with a positive result of 7.807 million euros because it used reserves of 12.329 million euros for this purpose.

The "suddeutsche zeitung", WDR, NDR and the "bild" newspaper had already reported in march that the tax investigation department had accused the DFB of deliberately swindling the tax authorities in the repayment of an ominous loan of 6.7 million euros to former adidas boss robert louis-dreyfus in 2005. This 6.7 million is at the heart of the world cup scandal, which was revealed two years ago but has still not been fully resolved.

The starting point is a payment of millions made by world cup organizer franz beckenbauer in 2002 via switzerland to an account in qatar belonging to the company network of then-FIFA official mohamed bin hammam. Shortly afterwards, beckenbauer received this sum back as a loan from louis-dreyfus, who in turn demanded his money back from the DFB three years later.

This step is crucial for the tax assessment of the world cup payments, because in 2005 the association transferred the 6.7 million to the former adidas boss via an account of the world federation FIFA. However, he disguised the money in his tax declaration for 2006 as a contribution to a world cup gala. And this never took place.

The DFB does not even deny the false declaration. The association argues, however, that louis-dreyfus gave the money to beckenbauer in order to secure an organizational cost subsidy from FIFA. The 6.7 million euros are therefore directly related to the world cup. "The DFB continues to believe that the payment of the 6.7 million euros was a business-related expense and was therefore rightly claimed as a business expense for tax purposes. Consequently, there is also no basis for a denial of public utility for the year 2006," the statement reads.

The tax office sees things differently. In the opinion of the authorities, the 6.7 million euros should not have been concealed and certainly not claimed for tax purposes. The tax office considers this a serious case of tax evasion. In march, the "suddeutsche zeitung", WDR, NDR and the "bild" newspaper even quoted from an interim report by the tax investigation office, which spoke of "air bookings" and "sham transactions" at the DFB.

The association is nevertheless apparently very sure of its case. The financial report from july shows that "no provision for tax risks" was made in the financial statements for the 2016 fiscal year.