Football’s world governing body, FIFA, will retain its status as an association, meaning it will not be taxed like a normal company, the Zurich cantonal authorities have ruled.
The local government has rejected a motion from the leftwing Social Democratic Party to force all entities with a turnover of more than CHF1 billion ($1 billion) to pay standard corporate tax rates. The money passing through FIFA’s coffers tripled this benchmark last year.
Zurich-based FIFA’s stated purpose is to distribute the income it receives from the World Cup and other events to national football associations and other projects to enhance the game globally.
Sports bodies based in Switzerland enjoy association status. Associations not obliged to register with the state or to publish their accounts. They are granted tax breaks and flexible legal terms that allow them to govern their own affairs.
A 2015 study stated that while such entities are not taxed at corporate levels, they indirectly bring around CHF1 billion annually to the Swiss economy. This is because employees are taxed and because the 45 sporting bodies are serviced by local companies.
But this argument failed to impress Zurich Social Democrat Stefan Feldmann, who said: “It’s a mystery to me how FIFA can be described as a non-profit association. Nobody on the street understands that. This runs counter to a sense of justice.”
FIFA has been embroiled in numerous corruption scandals stretching back over the last few years.
Canton Zurich’s decision to retain FIFA’s non-profit status follows hard on the heels of allegations that the sporting body’s Swiss president, Gianni Infantino, has privileged access to the Swiss attorney general, Michael Lauber.
The claim was made by the Football Leaks investigative journalism team, which accused Infantino of arranging secret meetings with Lauber, whose office is investigating allegations of corruption against FIFA.
FIFA insists there has never been any impropriety in its dealings with the attorney general’s office. However, Swiss parliamentarian Hans Stöckli, told Swiss public television, RTS, at the weekend that he would raise the issue with a committee that has oversight over the activities of the attorney general.