Spain, the 2026 FIFA World Cup winners, might have to pay up to 30% tax in the US on their $50 million prize money. This could be a big blow for countries like Brazil and Argentina, which don't have a tax treaty with the US.
Washington: The Spanish football team, fresh off their 2026 FIFA World Cup win, might have a big tax bill waiting for them in the United States. According to a Fox News report, they could end up paying up to 30% of their massive $50 million prize money as US federal tax.
The rule is simple: the US Internal Revenue Service (IRS) taxes any income that athletes or associations earn on American soil. Now, Spain does have a Double Taxation Avoidance Agreement (DTA) with the US, but it's not clear how much of a discount this will give them on the prize money. In the past, World Cup host nations usually gave full tax exemptions to FIFA, the teams, and the players. This time, however, the US has made no such announcements.
It's important to remember that FIFA doesn't pay the players directly. The prize money goes to the country's football association, which then distributes it among the players, coaches, and support staff.
Big Trouble for Smaller Nations
Out of the 48 countries that played in the World Cup, only 18 have these tax deals with the US. European giants like Spain, England, France, Germany, and Italy will get some relief, along with countries like Canada, Mexico, Australia, Egypt, Morocco, and South Africa.
But for others like Brazil, Argentina, Japan, South Korea, Senegal, Nigeria, Haiti, and Curacao, it's a different story. Without a treaty, they are expected to pay a huge amount in taxes. This will hit the football associations of smaller countries much harder than the big, wealthy ones.
No Escape for Players
Even with these tax treaties, the players themselves won't get a free pass on their personal income. They will still have to pay US taxes. The treaties are more of a relief for the football associations and the support staff.
The US has a high federal corporate tax of 21% and a personal income tax that goes up to 37%. On top of that, states like California (13.3%) and New Jersey (10.75%) have their own taxes, which will be a further blow.
The good news is that Florida, where some matches were played, has no state income tax. For someone like Brazil's coach Carlo Ancelotti, this means he'll have to pay taxes in both Brazil and the US. But England's coach Thomas Tuchel is luckier. Thanks to the UK-US treaty, he won't have to pay any extra tax in the US.
