Spanish government gets tough over taxes

The Spanish government has begun slapping embargoes on some football clubs' future earnings as it tries to force them to settle outstanding tax bills worth around 750 million euros at the start of the year.

The clubs' liabilities attracted the attention of European Union anti-trust officials, prompting the government and the football league (LFP) to agree a "road map" in April designed to allow them to settle up.

Spain's tax agency has collected 329.9 million euros this year, with 305.1 million coming from clubs in the first division, according to an agency briefing note.

Some 130 million euros more is expected to pour into the agency's coffers this year, around 55 million of which is accounted for by embargoes placed on income from sources including audiovisual rights, ticket sales and lottery, the note said.

The agency declined to specify which clubs had been affected by the embargoes.

Football clubs' tardiness in paying their taxes has caused deep resentment in Spain at a time when many citizens are having to tighten their belts as wages and benefits are cut and taxes on incomes and goods and services rise.

As well as their tax liabilities, clubs owe around 600 million euros to the social security system and many are in dire financial straits after years of profligacy.

Prime Minister Mariano Rajoy said this week clubs would not be allowed any more leeway.

"The clubs will pay their debts to the tax authority and the social security system," Rajoy told Spanish radio.

"Clubs, players and everyone else has to pay taxes," he added. "The Treasury Ministry has my instructions."

The government's tough new line appears to already be having an effect on La Liga clubs.

Total spending by the 20 teams in Spain's top division in the last transfer window fell by 65 percent to 128 million euros, according to the latest Prime Time Sport Transfer Review published in September.

La Liga clubs earned 55 million euros more from player sales than they spent strengthening their squads, the study showed.