Our law firm has obtained a favorable decision, upon retrial, for a football player who had been obliged to pay Value Added Tax as a result of performing sporting activity for a well-known first-league club from Cluj-Napoca.
On 04.07.2025, the Cluj Tribunal rendered Civil Judgment no. 1736/2025, through which it decided that football players cannot be taxable persons under art. 269 para. (4) of the Fiscal Code and cannot be registered as VAT payers.
This is the first solution, at the national level, through which tax assessment decisions concerning fiscal obligations and accessories (interest and late-payment penalties) established against a football player have been annulled.
Through an extremely meticulously drafted judgment, the court found that (a) the footballer’s activity is one eminently dependent, specific to an employment relationship; (b) there was no obligation to register as a VAT payer and therefore he did not owe VAT; (c) in his case, the principle of VAT neutrality was not respected since the athlete cannot exercise any right of VAT deduction.
In its reasoning, in order to overcome the contradictory provisions in domestic legislation, the trial court took into account the jurisprudence of the Court of Justice of the European Union.
The Tribunal notes in general that athletes cannot have several employers simultaneously, cannot carry out another remunerated activity, and that a professional football license does not have the meaning of a license for free practice in a regulated profession (such as architecture, law, etc.).
The court notes that, by the will of the legislator (art. 14 indic 1 of Law 69/2000), an independent character was conferred to the activities performed by the professional athlete, but by analyzing the contractual obligations, the Tribunal notes that the claimant was, to a large extent, performing a dependent activity, specific to labor law.
According to art. 11 para. (11) of the Fiscal Code, in the field of value added tax and excise duties, the tax authorities and other national authorities must take into account the jurisprudence of the Court of Justice of the European Union.
Advocate General Tesauro, in his conclusions presented on June 4, 1991, in Case C-202/90, Ayuntamiento de Sevilla v. Recaudadores de Tributos de las Zonas primera y segunda, emphasized that it must be established whether the existing legal relationship creates an employer–employee relationship with respect to working conditions, remuneration, and the employer’s liability (even if there is no individual employment contract in the narrow sense of the term).
Thus, as regards the working conditions, an independent activity implies, as also emphasized by the claimant’s counsel, that athletes freely choose their teammates, the material base necessary for the provision of services, and the working schedule. It is also certain that an independent athlete does not grant a club the right to control his activity and to impose disciplinary measures (such as those usually included in the internal regulations of a sports club).
In order to determine whether the athlete carries out a dependent or independent activity, the court analyzed the criteria provided by art. 7 of the Fiscal Code and found that only one condition is fulfilled, which is insufficient to attract the fiscal regime of independent activity.
Analyzing the criteria in art. 7, in relation to the specifics of the claimant’s activity, also taking into account the provisions of the contract and the clauses under “rights and obligations of the parties,” the Tribunal concludes:
3.1. The natural person has the freedom to choose the place and manner of performing the activity, as well as the working schedule – this condition is not fulfilled in the claimant’s case, as a professional football player, because once the contract with a club is concluded, the club/coach is the one who establishes the training sessions, schedule, the location where they take place, duration, and the specific physical activities to be carried out; also, the player’s attendance at training sessions is mandatory – contract – lit. h, p. 12 verso, vol. II; the footballer is obliged to undergo the examinations and treatment requested/recommended by the club’s doctor and not to follow any treatment without first informing the club doctor. It is forbidden to attend nightclubs or other nocturnal events without the club’s approval.
3.2. The natural person has the freedom to perform the activity for several clients – this condition is not fulfilled in the claimant’s case, since a football player concludes a sports activity contract with only one club during a given period of time. If he changes clubs, he no longer performs sporting activity for the previous club – lit. r of the contract, p. 13 vol. II; the footballer’s image rights belong exclusively to the club – art. VIII, p. 14 verso. Under the “guarantees” section – the professional footballer undertakes not to conclude, with another sports structure, during the same period of time, another contract/convention for sporting activity or employment contract, under disciplinary sanction.
3.3. The risks inherent to the activity are assumed by the natural person carrying out the activity – no; according to art. 4, obligations of the club – lit. h, “in the event of the professional footballer’s injury during training or competition, the club undertakes to pay him his contractual rights” p. 14 vol. II.
3.4. The activity is carried out using the assets of the natural person performing it – not fulfilled in the claimant’s case; the assets used belong to the club or are procured by the club – training field, locker room, means of transport, accommodation, equipment – balls, clothes, and other goods used in training or official matches – lit. j, k of the contract, p. 12 verso, art. 4 lit. g – p. 14; under the “bonuses” section it is stipulated that two meals per day are provided at a restaurant approved by the club.
3.5. The activity is carried out by the natural person using his intellectual capacity and/or physical performance, depending on the specifics of the activity – yes, condition fulfilled.
3.6. The natural person is part of a professional body/organization with the role of representation, regulation, and supervision of the profession performed, according to special normative acts regulating the organization and exercise of that profession – no.
3.7. The natural person has the freedom to perform the activity directly, with employed staff, or in collaboration with third parties under the law – not fulfilled in the claimant’s case; the activity of a professional footballer is carried out only directly, personally by the athlete, collaboration being excluded.
Furthermore, the court analyzed the VAT mechanism and the principle of tax neutrality, in order to find the non-observance of this principle in the case under judgment.
Considering the specifics of the activity carried out by the claimant, the conditions of carrying out the activity, the relationship between the athlete and the club as presented above, as well as the VAT mechanism, we find that although the Sports Law defines the professional athlete’s activity as independent, nevertheless it is difficult to conclude that the professional football player must pay VAT, since a football player carries out his specific activity – training, participating in the club’s games, according to the schedule and rules of the club/federation, and in return receives a sum of money. This type of performance of obligations falls closer to the sphere of labor law relations and less to that of taxable operations, considering the high degree of dependence analyzed above.
A taxable person registered for VAT purposes must pay the difference between the amount of tax collected from his clients – applied either on the added value or on the specific transaction – and the deductible tax paid or owed by that person for the purchase of goods and services, as well as for his expenses. By the deduction mechanism, we understand that a taxable person may retain the portion of the tax corresponding to the amount of tax paid for acquisitions/expenses. Consequently, the VAT collected does not represent a cost for a taxable person registered for VAT purposes. Thus, the deduction mechanism applies to each taxable person registered for VAT purposes involved in the process of production or distribution of a good or service or in performing a specific operation.
The mechanism applies when goods or services are delivered or provided to a person who has no right of VAT deduction, generally called the final consumer. The final consumer is the person who will either consume the good or service, or resell it without collecting VAT on the added value, being obliged to pay the total amount of the tax due, calculated at the price of the good or the tariff of the service, regardless of the applicable rate and having no possibility to recover the tax paid.
One of the principles in the field of VAT is tax neutrality. Due to the deduction mechanism of deductible tax, no matter how many taxable persons registered for VAT purposes are involved in the production and distribution process of a certain good or service, the total amount of VAT collected will always be the same, since it depends only on the price charged to the final consumer, who has no right of deduction, and on the applicable VAT rate.
However, the claimant, a football player, has no clients, does not collect VAT, and has no deductible expenses, has no suppliers, since he personally does not make purchases for carrying out his activity. Any possible acquisitions are made by the club with which he has a sports activity contract. Therefore, he appears as a VAT payer, but the VAT neutrality is not respected because, as seen from the VAT returns filed, he did not exercise any right of VAT deduction.
As a conclusion, the court gave precedence to the jurisprudence of the CJEU and found that the claimant football player had no obligation to register as a VAT payer.
For all these reasons, the Tribunal considers that the claimant’s activity was eminently dependent, in the meaning of the Fiscal Code, and that he was not a taxable person under art. 269 para. (4). Based on art. 11 para. (11) of the Fiscal Procedure Code, it will give precedence to the jurisprudence of the CJEU and will consider that the norms underlying the assessment are those from the Fiscal Code, and that the claimant had no obligation to register as a VAT payer, nor to submit the forms provided under art. 102 para. 2 of the Fiscal Code, thus he did not owe the VAT as calculated through the returns filed. Since the VAT amounts were not owed, it follows that it was not necessary to calculate accessory fiscal obligations.
We mention the fact that the case presented several particular elements of great importance, such as the finding by the court, following the procedure provided by art. 304 and the following of the Civil Procedure Code, that the power of attorney by which the player’s club had registered him for VAT purposes and had carried out fiscal activity on his behalf was false.
The judgment is not final, being appealed by both parties.
This material was written and prepared for the website of Gherdan and Asociații SCA by coordinating lawyer Sabin Gherdan.
