He agrees with the footballer that expenses for Social Security or other European social insurance are deductible when they are mandatory for workers
It also establishes that the direct returns of the person transferring image rights are considered movable capital or economic activities, as the case may be.
The Supreme Court has agreed with the footballer Gerard Piqué and has canceled the fines for 1,457,855 and 678,012 euros imposed by the National Court when ratifying those established by the Central Economic-Administrative Court (TEAC) after reviewing the tax settlement agreement issued by the Special Delegation of Catalonia for the Tax on the Income of Individuals for the years 2008, 2009 and 2010 of the Football Club Barcelona player.
The Contentious Chamber of the high court accepts the footballer’s allegations on two issues. The first of them, which will mark the tax treatment that other athletes who are in the same situation will receive, has consisted of determining that, as Piqué requested, paid contributions to Social Security or social security management entities in another State of the European Union, when they are mandatory for workers, they are considered deductible expense from earned income in personal income tax.
The Supreme Court remembers that when Piqué was playing for him Manchester United, the club withdrew from its monthly payroll certain amounts to pay the National Insurance (equivalent to our Social Security). Hence, as with Social Security contributions, “it must be understood that we are facing legally imposed coercive obligations as a result of the development of employed work”, so that “it is connatural to the essence of the tribute that all those “own” expenses to obtain the performance are deducted “.
The second question raised, also in relation to this same tax, consisted in determining that the returns obtained directly, without the intermediation of a society, by whom they assign their image rights to third parties and that involve the development of additional activities of a personal nature by the person who assigns those rights, not returns from movable capital or economic activities are automatically considered, but must study each case.
In Piqué, the Supreme Court takes into account that although the player has 70% of his company Kerad Project It is his brother who is assigned the management of his image rights, data that shows that they are of such an entity that they require personal and material resources for their management, so that, unlike what the National Court established, returns must be considered of economic activities.
The Supreme Court explains that the National Court had opted for consider the income from the transfer of rights as income from movable capital and reject that they can be classified as income from economic activities, and therefore considered void the contract between the footballer and the entity that exploited the rights. However, the Third Chamber, as it had already ruled in relation to other footballers, declares the opposite and insists that each case and its circumstances must be considered.
The sentence indicates that the Hearing had been limited to say that there was no “an ordering by the appellant of personal and material means” without further detail, but “the truth is that it is clear that in the business network that revolves around the entity Kerad Projet, with interests in various sectors “, in which Piqué has 70%, his brother with a much lower share is assigned the management of its image rights.
It also considers significant that in “the examination carried out by the Inspection of the years 2011 to 2014” it is concluded that it was “income from economic activities for far exceeding what is the mere exercise of the right to image”, because ” it is carried out on similar contracts and with respect to almost the same contractors “,
For the Supreme Court they are “contractual obligations that exceed what is the mere exercise and exploitation of image rights”, which makes it an activity that specifies the organization of personal resources, as his brother does when taking charge “of the organization to exploit these rights, and materials, since an activity that transcends the mere use and exploitation of the appellant’s image by third parties is required in the various contracts & rdquor;.