Tax Turmoil Looms Over FIFA’s Huge $1bn Club World Cup Prize Pool

FIFA is engaged in complex negotiations with United States authorities heading into the Club World Cup after failing to obtain tax exemptions for the 32 participating clubs.

In March, FIFA unveiled an eye-watering $1 billion (£754 million) prize pool for the tournament, including a massive $125.8m reward for the winning side. 

However, without tax agreements, clubs could face tens of millions of dollars in taxes owed to US authorities on top of liabilities in their home countries. 

With 29 out of 32 participants, including Chelsea and Manchester City, based outside the States, the absence of tax relief could significantly diminish the financial incentives.

Meanwhile, FIFA has ensured various tax exemptions for the 2026 World Cup hosted by the US, including relief from numerous city, state, and ticket sales taxes for the participating nations.

However, the Club World Cup’s shorter planning timeline has made it virtually impossible for the world governing body to obtain similar privileges. 

With the hosts naming the 12 host venues in late September – less than nine months ahead of the tournament – there has been almost no wriggle room to negotiate comparable tax arrangements. 

Varying tax rates across different US states pose additional challenges and threaten to lead to financial discrepancies for clubs depending on where they play. 

For instance, Florida – home to two Club World Cup venues in Miami and Orlando – doesn’t impose a state income tax, whereas many other host cities warrant tax rates ranging from 3% to as high as 7%.

Perennial Ligue 1 champions Paris Saint-Germain could be among the worst-affected teams since they play two of their three group matches in Los Angeles, California, where the takes rates reach up to 7%.

Like PSG, Chelsea, whose group outings are in Pennsylvania and Atlanta, where income tax is 5.5%, could also face a significant tax burden, potentially eating into their tournament earnings.

By contrast, Man City would heavily benefit from facing Juventus in their curtain-dropping group fixture against Juventus in Orlando. 

Tax Turmoil Looms Over FIFA’s Huge $1bn Club World Cup Prize Pool