A significant financial imbalance is set to impact the upcoming FIFA World Cup, with many participating nations facing unexpected costs due to unresolved tax arrangements in the United States.
While FIFA itself enjoys tax-exempt status in the US, this privilege does not extend to the football associations of the 48 qualifying countries. Their earnings from the tournament will be subject to various federal, state, and local taxes. The burden will fall most heavily on nations without a formal Double Taxation Agreement (DTA) with the US government.
Of the qualified teams, only 18 benefit from such a treaty, which exempts their federations from US federal taxes. The majority of these are European nations, alongside Australia, Egypt, Morocco, and South Africa. Co-hosts Canada and Mexico have independently granted tax exemptions to all visiting teams for matches in their territories.
This framework creates a stark disparity. Major footballing nations like England, France, and Spain will incur far lower costs. In contrast, smaller and debutant nations such as Curaçao and Cape Verde face substantial tax liabilities on their tournament income. The issue extends to team staff and coaches, whose federation payments are taxable in the US for teams without a DTA.
For example, Brazil’s head coach will be subject to taxation in both his home country and the US, whereas his English counterpart will only be taxed domestically. While larger federations may cover such additional bills, the financial hit could be crippling for smaller associations, diverting funds that could otherwise support local football development.
The situation is further complicated by varying state tax rates across the US host cities. Teams playing in Florida will avoid state taxes, while those with matches in New Jersey or California face rates exceeding 10%.
With FIFA providing a fixed operational budget to all teams and having reduced daily allowances compared to the previous tournament, the additional tax burden poses a serious challenge. It threatens to turn the World Cup into a net financial loss for many federations, particularly those from smaller, non-European nations who were counting on the tournament revenue.
