Fifa is on the verge of securing a last-minute tax exemption for all 48 World Cup qualifying teams following intensive negotiations with the US treasury. This significant breakthrough, achieved after months of lobbying, means national associations will likely be exempt from federal taxes, though many will still face state and city tax obligations on their World Cup earnings.
Negotiations and Tax Exemption Details
After discussions with the treasury that also involved Donald Trump's World Cup taskforce, Fifa has received assurances that national associations can apply for tax exemption under section 501(c)(3) of the internal revenue code. While a successful application is not guaranteed, Fifa has been reassured that it will likely be granted if applicants follow proper procedures. Key requirements for tax exemption include not benefiting private shareholders or engaging in political activities—conditions that national governing bodies should easily meet.
Fifa has been classified as a tax-exempt organisation in the US since the 1994 World Cup, but until now, it has been unable to secure a similar exemption for its member associations. Canada and Mexico, the other co-hosts for this summer's World Cup, have already granted tax exemptions to national associations playing in their countries.
Financial Impact and Prize Money Increase
US treasury approval would save national associations millions of dollars and alleviate concerns about the cost of participating in the World Cup, with tax rates, travel, and hotel expenses being major worries. The Guardian reported last month that many countries feared losing money even if they advanced deep into the tournament, prompting them to lobby Fifa for increased prize and participation funds.
At a meeting of the Fifa Council in Vancouver, it was agreed to boost payments by 15%, raising the total pot to $871 million (£645 million). All 48 countries are now guaranteed at least $12.5 million. Fifa declined to comment on the tax negotiations, with a source describing the situation as ongoing.
