Brussels – FC Barcelona, Real Madrid and two other Spanish football clubs will not have to pay back taxes after a court on Tuesday annulled an European Union (EU) state aid ruling.
It was a second setback for regulators seeking to tackle tax avoidance.
The European Commission’s crackdown in recent years has resulted in orders to multinationals, including Apple, Starbucks, Fiat Chrysler, Engie and Amazon.
They are to pay billions of euros in back taxes to various EU countries.
The EU competition enforcer said in its 2016 ruling that FC Barcelona, Real Madrid, Athletic Bilbao and Osasuna enjoyed a 25 percent tax rate for more than 20 years.
It said this was in comparison to the 30 percent norm for sports companies.
It had added that the clubs each had to pay back up to 5 million euros (£4.3 million).
The lower tax rate came about because the four were treated as non-profit organisations, instead of professional football clubs with limited liability.
The Luxembourg-based General Court said the Commission made several errors in assessing the case and used figures that only covered four tax years while the scheme ran from 1990 to 2015.
“The Commission has not shown to the requisite legal standard that the measure at issue conferred an advantage on its beneficiaries,” judges said.
The Commission last week suffered a rare defeat.
That was when the General Court struck down its ruling against a Belgian tax break that benefited as many as 35 companies including AB InBev and BP.