Key developments/cases from 2025 in Spain
- Xabi Alonso – National Court
1) Xabi Alonso – National Court
The case involves current Real Madrid´s coach, Xabi Alonso, when he was a player of the team back in 2012, whose tax position was challenged when the Tax Authorities treated commissions paid by Real Madrid CF to his agent as part of his employment income. The National Court´s judgement of March 12th, 2025, follows the Supreme Court’s doctrine on the limits of the administration´s power to reclassify legal transactions, particularly under article 13 of the General Tax Law (hereinafter, “GTL”). The regularization consisted of allocating in Xabi Alonso´s personal income tax return (hereinafter, “PIT”), as employment income, the amounts that Real Madrid CF paid to his agent´s company for negotiating his contract, under the assumption that the agent acted solely on behalf of the player and exclusively for his interest, so that the club was effectively paying a personal retribution of the taxpayer.
In the appeal, one of the main issues was that the Tax Authorities had exceeded the scope of the article 13 GTL by not limiting itself to a simple legal classification of the contracts, but by disregarding the legal agreement between the club and the agent and reconstructing the transaction as if the payments were made directly to the player. The National Court, in line with its own previous resolutions and with the Supreme Court judgements from February 2023, concludes that this goes beyond what article 13 GTL permits and that, if the administration wanted to tackle a possible artificial arrangement, it should have resorted to the specific instruments provided in the articles 15 of 16 GTL instead of stretching article 13 GTL. Because the Tax Authorities used an inappropriate legal route for the regularization, the National Court declares the tax assessment and the related penalty null and void, without effect, and orders their annulment, thereby upholding Xabi Alonso´s appeal.
2) Diego Costa – Madrid Superior Court
In September 2025, Diego Costa concluded his legal proceedings with the Spanish Tax Authorities related to his tax residency position in 2014. The case resolved around whether the player should have been considered tax resident in Spain during 2014 or not.
The Madrid Superior Court upheld a fine imposed on the player for failing to declare his personal income tax (hereinafter, “PIT”), as Spanish tax resident in 2014. The undeclared amount corresponded to payments made by Chelsea FC to his agent, which the Spanish tax authorities reclassified as indirect remuneration to Diego Costa himself. The court determined that Diego Costa was still a Spanish tax resident despite his transfer to Chelsea FC in July 2014 based on the article 9 PIT, exceeding the 183 days criteria, and that he intentionally omitted these sums to avoid paying taxes in Spain.
3) Real Madrid – Morata – Juventus – Madrid Superior Court
This rule involves not only Alvaro Morata, but two of his former clubs, related to the payments made to his agent, applying the Supreme Court doctrine that limits the use of article 13 General Tax Law (hereinafter, “GTL”). The Tax Authorities had classified these payments as indirect remuneration to the player, arguing that agents exclusively represent the player´s interests and do not provide any services to clubs, thus shifting them to his personal income tax return (hereinafter, “PIT”), as employment income, and even imposing penalties for lack of documentation.
The Madrid Superior Court accepted this economic reasoning but rejected its legal basis, as it exceeded the mere qualification of acts under the article 13 GTL, which does not allow reconfiguring this type of relationships (club-agent-player) without justifying simulation (article 16 GLT) or norm conflict (article 15 GTL), following the Supreme Court ruling, which warned against an expansive and inspectoral power.
In its development, highlights that the Tax Authorities disregards direct contracts between clubs and agents, assuming without proof that they form part of the player´s gross remuneration because the agents acted only on behalf of the player; the court stresses that logical indications or market logic are insufficient to re-label operations, requiring specific procedures to challenge contractual appearances and formal guarantees. Additionally, it annuls the penalty for lack of specific motivation regarding culpability, rejecting generalities or defaults, in line with the presumption of innocence and constitutional doctrine.
The doctrine consolidates that for payments to agents, the Tax Authorities must prove simulation or conflict to impute them to the player, strictly limiting the qualifying power of article 13 GTL and avoiding it use as universal avenue that renders other legal mechanisms unnecessary, thereby promoting rigorous inspections with greater evidentiary burden and specific motivation for penalties.
4) Sevilla FC – Supreme Court
This rule refers to a reclassification decided by the Spanish Tax Authorities for payments made by Sevilla FC to agents – for players signings, renewals, or transfers – as employment income of the player under FIFA rules, making such payments indirect remuneration subject to personal income tax return (hereinafter, “PIT”) withholding. Using article 13 GTL, the Tax Authorities disregarded the formal contracts between the club and agents, considering them a disguise for the true nature of the transactions as player benefits.
The core issue in the appeal was whether the Tax Authorities can invoke article 13 GTL qualification power to bypass valid contractual relationships and recast payments as if made on behalf of the players. The Supreme Court upholds the club´s appeal, specifically for agents’ payments, ruling that the administration overstepped article 13 GTL´s boundaries. It establishes binding case law that his position allows only legal characterization of facts, not the substitution or ignoring formally valid legal transactions, as that it would take over on anti-abuse rules like simulation under article 15 GTL. This decision reinforces limits on administrative
recharacterization in sports law matters, protecting contractual autonomy between clubs and agents.
5) AFE’s Retirement Fund for Female Footballers – Supreme Court
The Supreme Court has ruled in favor of the Spanish Footballers’ Association (hereinafter, “AFE”), confirming the legality of its Career-End Fund for female footballers and rejecting claims from rival unions FUTPRO and Futbolistas ON. The fund, initially funded by a percentage of men´s football TV rights and later by AFE´s own resources, provides post-retirement benefits like pensions for incapacity or death to affiliated female players in La Liga F.
The landmark judgment, issued on February 18, 2025, clarifies that no discrimination or violation of union rights exists since men’s and women’s football operate through separate leagues with independent organizations and financial structures. By allowing AFE to use its own resources to finance benefits for affiliated players—covering retirement, disability, or death—the Court reinforces the autonomy of unions to manage member-only welfare systems. The decision also secures critical tax certainty, establishing that the fund is exempt from personal income tax (hereinafter, “PIT”) and cannot be treated as employment income.
Sports Law in 2026 – Key issues to watch in Spain
As we move into 2026, the Spanish Tax landscape continues to evolve, and sportspeople should be aware of the increasing focus of the Spanish Tax Authorities on nonresident income. The Spanish Tax Authorities are placing more emphasis in the Spanish source income earned by the sportspeople, so that these earnings are properly taxed.
In addition to the international information exchange, Spanish domestic regulations are reinforcing this control. A recently approved Royal Decree requires financial institutions to report more detailed and frequent data on accounts, transactions, and financial returns, giving the Tax Agency better tools to monitor income.
Now sportspeople should carefully consider the source of their income, keep the proper documentation and to be able to show the source of their income in case their position is challenged by the Spanish tax authorities.
