Tax in Football: Why are Monaco attractive to the best players?

Over the past few days, AS Monaco's tax avoiding activities have been the subject of much media attention given that the French League authorities want to move Monaco's headquarters into France to bring equality to all the clubs in the league. 

Currently Monaco levies no income tax upon individuals, meaning that all the money earned by footballers and the general public alike is received by the earners. This absence of income tax has attracted a large number of 'tax refugees' with the incentive of larger 'after tax' (not that tax applies) pay packets.  

The advantage to a football club such as Monaco in this instance, is that they can now attract the biggest and best players to their club as they have done so recently with the surprise acquisition of star players such as Radamel Falcao, James Rodriguez and Joao Moutinho, to name a few. 





The problem with this is that other French clubs, including Lille and Lyon are unable to compete financially with the tax advantages experienced by Monaco. To rub salt even further into the other French clubs faces, the owner of Monaco is Dmitry Rybolovlev, a Russian billionaire, who is #119 on the Forbes' list of richest billionaires in the world. 

The plan by the French football association is to order a hearing to take place to force Monaco to relocate their headquarters to France by June 2014 or face possible suspension from the league.

If Monaco were to relocate, then their players and staff would have to abide with the proposed 75% income tax rate which is to be set for individuals who earn more than 1m euros a year. This plan would allow other clubs to compete on a more level playing field with Monaco and would bring equality overall to the league. 

In comparison to the recently proposed tax rate in France of 75%, the tax rate in England for top earners is 50%, with Spain's top earners having to pay 56% income tax, both of which are staggeringly lower than the rate in France which would seem to make it more appealing to play in the Premier League or La Liga, which reflects the pattern in reality to where the top quality players are found in Europe.