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The Supreme Court agrees with Gerard Piqué against the Treasury and cancels the fine of 2.1 million

"Contributions paid to Social Security - or social insurance management entities - in another State of the European Union (...) must be considered as a deductible expense"


Gerard Piqué will no longer have to pay a fine of 2.1 million to the Treasury after the Supreme Court has heard his appeal against the sanctions that were imposed on him for the liquidation of personal income tax for the years 2008, 2009 and 2010. Piqué's first argument focused on clarifying whether the contributions paid to Social Security - or social security management entities - in another State of the European Union can be deducted from income from work in personal income tax. The footballer specifically pointed to the payments he had paid during his time at Manchester United, amounts that were withdrawn by the club to face the National Innsuranse, a system equivalent to Social Security. After analyzing the case, the Supreme Court establishes the following doctrine: "Contributions paid to Social Security - or social security management entities - in another State of the European Union, when they are mandatory for workers, must be considered as an expense deductible from work income in Personal Income Tax ”. As he argues, "it should be understood that we are, like the Social Security contributions, faced with legally imposed coercive obligations as a result of the development of employed work", so these payments can be deducted when facing personal income tax.

The second argument focused on determining how the returns obtained by those who transfer their image rights to third parties without the intermediation of a company should be classified, and these have a cause other than the mere passive use of rights: as returns from movable capital or as returns from economic activities. Image rights aside, serve as an example that, if someone rents a car to an individual, the price paid will be considered a return on movable capital, but if someone is engaged in commercial vehicle rental, with a premises and contracted personnel, it will be then of a performance of economic activities. Before the case of Piqué reached the Supreme Court, the National Court concluded that the income from his image rights should be considered income from movable capital, thus rejecting the claim to qualify them as income from economic activities and dismissing the contract as null and void. between the footballer and the entity that exploited them. Faced with this position, the Supreme Court insists that the common denominator "is its casuism, since legally it does not seem that the distinction has any difficulty, however it will be each case and its particular circumstances that lead to one or another qualification."

With that idea as a backdrop, the court begins to analyze Piqué's activities and ends up agreeing with him: “The truth is that it is clear that in the business network that revolves around the Kerad Projet entity, with interests in various sectors , and in which the appellant had a majority stake of 70%, expressly one of the minority partners, the brother, was assigned the management of the image rights of the appellant, that is, there was a designated person ". To reinforce the idea that Kerad Projet has "interests in various sectors" and the role of Piqué's brother in managing his rights, the Supreme Court in turn affects the contracts signed by such entity, with different advertising content, and concludes noting that therein are agreed “contractual obligations that exceed what is the mere exercise and exploitation of image rights, constituting an activity that requires the organization of personal media.” It considers, therefore, that income from activities should be considered economic and not of movable capital, as claimed by the footballer himself.




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