The Spanish league could very soon lose one of its handiest advantages, an advantage which puts its clubs in pole position in the European transfer market - namely the low tax charges foreign players enjoy in La Liga.
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Cristiano Ronaldo and Kaka both benefitted from favourable taxes.
This week Spanish football was hit hard with a government decision. A painful blow to all the top clubs and one that has put them all on alert, to the extent that rumours of a potential strike are flying around.
No one likes financial interference and that is precisely the mindset of the millionaire clubs in the country. It was back in 2004 when, coinciding with the arrival of star David Beckham, Spain decided to lower the taxes for foreigners working in the country in an effort to encourage the arrival of top scientists, investigators and other qualified workers in the hope that a lax tax system would be an attraction for all kinds of world class stars.
This Ley Beckham - the Beckham Law - worked wonders in football at least. It opened up the market for Spanish clubs as the most expensive players could be offered juicier contracts knowing that they would have to pay just 24% tax, applicable on their first six years working in the country.
Clubs have revelled under the comfortable tax law and even pay the players' taxes, a very attractive situation for the very best footballers on the continent. But now the government has had a change of heart and will increase that 24% to 43% by 2010. That is why the Spanish League Association has quickly positioned itself by saying that if the law is approved, the competition will go on strike.
The government admitted recently that the Beckham Law, approved to favour the arrival of 'the gifted ones', hasn't worked at all and all that has happened is that football clubs have made the most of the situation by offering very high wages.
At the moment, foreigners in Germany pay 45%, the highest taxes in Europe, followed by Italy's Serie A with 43%, the English Premier League and the French Ligue 1 with 40% and Holland with 30%. However, England will move to the top of that table in April when the country moves to a 50% tax band.
Spain has been, and is still, a football fiscal paradise. This summer has been a perfect example. Kakà, Cristiano Ronaldo, Karim Benzema and Zlatan Ibrahimovic never wavered when the offer from Spain came their way. They all have net wages and, as usual, the clubs take care of paying their laughable taxes every year.
The Beckham Law could be abolished on January 1, 2010. Fortunately for Real Madrid and FC Barcelona, it won't be applied retrospectively, leaving the aforementioned stars untouched, but meaning all the foreigners working temporarily in Spain, having resided in the country for less than 10 years and earning more than
