Money, Equity And Taxes Make News Early At The 2023 Women’s World Cup

Forbes Money Taxes Editors’ Pick Money, Equity And Taxes Make News Early At The 2023 Women’s World Cup Kelly Phillips Erb Forbes Staff I write about tax news, tax policy and tax information. Following Jul 21, 2023, 05:57pm EDT | Press play to listen to this article! Got it! Share to Facebook Share to Twitter Share to Linkedin WELLINGTON, NEW ZEALAND – JULY 18: OCEAUNZ the official match ball of the FIFA Women’s World Cup, is . .

. [+] seen ahead of the FIFA World Cup Australia & New Zealand 2023 on July 18, 2023 in Wellington, New Zealand. (Photo by Maja Hitij – FIFA/FIFA via Getty Images) FIFA via Getty Images On July 20, teams representing 32 countries kicked off FIFA Women’s World Cup play in Australia and New Zealand.

Teams are initially engaged in round-robin style play before heading to the knockouts. The competition is just the 9th time teams will play for the Cup—the first official Women’s World Cup was played in 1991 in China. The U.

S. won that first Women’s World Cup and are the current defending champions. Winnings Teams are vying not only for glory but also for cash—the champions will take home $4,290,000 for their association and $270,000 per player.

Teams in the tournament must bring a squad of 23 players, including three goalkeepers—which adds up to $10,500,000 total for the winning team and players. The runners up will snare $3,015,000 for their association and $195,000 per player, while third place snags $2,610,000 for their association and $180,000 per player, and fourth place collects $2,455,000 for their association and $165,000 per player. The prize money increases as the teams move up in the tournament, but even those that don’t make it out of the group stage will still pocket $1,560,000 for their association and $30,000 per player.

In this composite image, a display of the shirts for every team taking part in the FIFA Women’s . . .

[+] World Cup 2023 in Australia and New Zealand. (Photo by FIFA via Getty Images) FIFA via Getty Images Overall, the total prize money for the tournament is a whopping $110 million—$80 million more than in 2019. That’s still, on average, just 25 cents for every dollar earned at the 2022 Men’s World Cup (compared to less than eight cents per dollar in 2019).

MORE FOR YOU Trump Pledges Death Penalty For Human Traffickers—Here’s What Else He’s Promising If Elected In 2024 Taxpayers Are Liable For Taxes On $1. 2 Million—Even If Their Daughter Stole It Shakira Is Facing Another Tax Probe Here s What We Know About Spain s Accusations The Shake Up In years past, FIFA paid prize money directly to the associations. But in June of this year , FIFA announced that it had brokered a deal that would specifically earmark payments for all players at the tournament.

In other words, the associations would receive their share, and “all participating players will receive guaranteed remuneration for their achievements at the tournament. ” Pay Problems The move was in response to concerns that players were not being paid properly. A Fédération Internationale des Associations de Footballeurs Professionnels (FIFPro) report of key findings collected from players competing in the Confederation Championships for the 2023 FIFA Women’s World Cup and in the 2022 UEFA EFA Women’s European Championship found that 29% of players reported not receiving any payment from their national team.

That figure is overwhelming, FIFRO noted, “when we acknowledge that these are the world’s top women’s players, on their road to the World Cup. ” FIFPro research also found that during the 2022 Confederation Championships and the 2022 Women’s European Championships, 66% of players had to take leave or unpaid leave from another form of employment to participate in these tournaments. And this year, the Jamaican Reggae Girlz are again feuding with their association over a perceived lack of support.

The team relied on crowdfunding to simply get to the World Cup in 2023. Earlier, in 2019 , Jamaica—the first Caribbean team to qualify for a Women’s World Cup—alleged that they had not been paid. When he announced the change, FIFA President Gianni Infantino said : “Under this unprecedented new distribution model, each individual player at the FIFA Women’s World Cup 2023 can now fully rely on remuneration for their efforts as they progress through the tournament.

” Noting that “[t]he global salary of women’s professional footballers is approximately USD 14,000 annually,” Infantino said “the amounts allocated under this unprecedented new distribution model will have a real and meaningful impact on the lives and careers of these players. Beyond this, all member associations will also receive a record financial distribution based on their performance, which they can use to reinvest back into football in their countries and which we believe will help to propel the women’s game even further. ” The Switch But on the eve of the tournament, Infantino made a different announcement .

This time, he said that FIFA would not guarantee payments would be made directly to the players. “Whatever payments we do, we will go through the associations, and then the associations will, of course, make the relevant payments to their own players,” he explained. The reason? Tax and residency-related complications.

That means, he claims, those payments are best handled by the individual associations. About FIFA FIFA estimated that it would receive total revenues of $807 billion for 2023. That money comes from ticket sales, television broadcasting, marketing, hospitality, and licensing rights.

According to the FIFA Women’s World Cup 2023 bidding process overview , “any and all revenues globally generated by FIFA through its activities – among others through the hosting of the FIFA Women’s World Cup, including all revenues generated in the host country/host countries – remain subject to the ordinary taxation regime for associations in Switzerland. ” FIFA stands for Fédération Internationale de Football Association and is the international governing body of soccer. Soccer is, of course, called football everywhere else in the world except in the U.

S. , where we call American football, football. FIFA, which was organized in 1904, is a global not-for-profit association under Swiss law.

It self-describes on LinkedIn as a global company with between 501-1,000 employees—a quick check of available jobs on LinkedIn shows that the company is hiring for on-site positions in France, Switzerland, and Liberia, as well as remote positions. On its website, FIFA boasts that it has “more than 850 FIFA staff from more than 60 nations. ” Many multinational companies handle global payroll issues on a regular basis.

It seems rather remarkable that a company of FIFA’s size could administer payroll for its global employees across 60 countries each year—but not the 736 soccer players at the tournament from just 32 countries for a tournament that occurs once every four years. Tax Matters Assuming that the players do get paid by their associations as promised, players are generally subject to tax according to the laws of their own country and the host country. Taxation in the host country or countries is typically limited to prize money and other compensation paid for Cup participation.

Players may still face tax bills in their home countries. That is especially true in the U. S.

, which touts some of the best-known and highest-paid players in the Cup. LYON, FRANCE – JULY 07: Julie Ertz of the USA celebrates following the 2019 FIFA Women’s World Cup . .

. [+] France Final match between The United States of America and The Netherlands at Stade de Lyon on July 07, 2019 in Lyon, France. (Photo by Elsa/Getty Images) Getty Images Under FIFA rules , you don’t necessarily have to live in a country to be eligible to play for that country since “any person holding a permanent nationality that is not dependent on residence in a certain country is eligible to play for the representative teams of the association of that country.

” FIFA clarifies that, generally, a player is considered to hold a nationality either automatically (such as from birth) or by naturalization. That means that players could live in another country—say, a traditionally tax-favored country like Panama—and still play for their home country as long as they meet the criteria. That won’t help U.

S. players, however: while some Cup players may apportion or exclude winnings based on locality, the U. S.

has a global tax system. As a result, U. S.

citizens and permanent residents must file and pay taxes on their worldwide income, no matter where they live or earn their money. Some players also earn money from other sources—like image rights and royalties. In the U.

S. , those are typically still taxable to the players even if generated in other countries. It’s true that there are ways to reduce the tax due with some planning—typically through foreign tax credits, exemptions, and treaties.

However, those deductions can be limited. Thanks to the Tax Cuts and Jobs Act, for example, previously deductible unreimbursed business expenses on Schedule A (think club fees and training expenses) are suspended for the years 2018 to 2025. For W-2 employees, that also includes agent fees—which can be a considerable hit.

However, expenses related to a trade or business remain deductible under Schedule C. And that exemption on sports winnings related to representing the U. S.

in competition granted in 2016? It doesn’t apply to the World Cup. It’s limited under the terms of section 74 of the Tax Code to prizes or awards won in the Olympic Games or the Paralympic Games. Soccer Is Growing Tax planning for athletes can be complicated—and it’s not going to get easier as the sport continues to grow.

Soccer is the most popular sport in the world, and it’s not showing signs of slowing down. AUCKLAND, NEW ZEALAND – APRIL 11: Young fans pose during the FIFA Women’s World Cup 100 Days To Go . .

. [+] launch event at Eden Park on April 11, 2023 in Auckland, New Zealand. (Photo by Fiona Goodall/Getty Images for FIFA) Getty Images for FIFA The Women’s World Cup alone has a worldwide audience of over one billion viewers.

According to FIFA , a combined 1. 12 billion viewers tuned into the official overage of the 2019 Women’s World Cup 2019 across all platforms – a record audience. In the U.

S. , many soccer players are household names—including those on the Women’s National Team. The USWNT have won four Women’s World Cup titles, four Olympic gold medals, and nine CONCACAF Gold Cups—even though they’ve only been around for about 20 years.

And now, arguably the greatest player to ever take the pitch will do so as a marquee player, not in Paris or London, but in Miami. Around 20,000 fans showed up in the rain just to see Lionel Messi introduced as an Inter Miami player. His July 21 debut has been hyped extensively, including on Apple AAPL T.

V. , where a little show about soccer—Ted Lasso—became a phenomenon. While discussions about money and taxes will always be a part of professional sports, for many, the beautiful game is more than a game.

It’s more than the players. It’s more than the trophies. It’s about how it makes you feel.

Bill Shankly, the famous Liverpool manager, once summed it up perfectly, saying , “Some people believe football is a matter of life and death, I am very disappointed with that attitude. ” He concluded, “I can assure you it is much, much more important than that. ” MORE FROM FORBES The Highest-Paid Players At The 2023 Women’s World Cup By Brett Knight MORE FROM FORBES By Scoring A Lucrative Deal At Inter Miami, Lionel Messi Is Playing A New Financial Game By Kelly Phillips Erb MORE FROM FORBES World Cup Mania: Figuring Out FIFA, Soccer & Tax By Kelly Phillips Erb Follow me on Twitter or LinkedIn .

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