Club news

THE RELATIONSHIP WITH THE TREASURY

22 Jun 2013
Deportivo owes €93.7 million to the Spanish Treasury, the relation was tense before, but now it seems more fluid. The main inquiry right now is if the government will accept to collect the money in twenty years.

If Deportivo want to reach an agreement with the creditors then the key to do it is to convince the main three names on the list. Supposedly this was the most complex relationship among the long list of creditors of Deportivo. The Galician club owes €93.7 million to the Tax Agency (AEAT) in terms of unpaid taxes plus interests, mainly the VAT (Valued Added Tax), so the government is the biggest creditor of the club.

The relationship was normal as the club was paying the debt according to pass agreement, but everything changed in 2011after Deportivo suffered the previous relegation to Segunda. The income for the TV contract was reduced and it was impossible to pay the debt. The club failed to make the payments and it was then when the AEAT begun to put an enormous pressure over the club.

It was the AEAT who asked for the embargo over all the incomes of the club, they begun sequestering the money coming from the sale of tickets and ended up getting control over all the incomes of the club, it was this situation the one that pulled the club to administration, because it was the only way to survive as there was no other way to liberate part of the money and pay the bills, including the employees’ and players’ wages.

But the situation has changed after the club entered into the administration, the Treasury tried to block some of the moves of the club at the movement of lifting the embargos, but in the last hearing they supported Deportivo when the club asked to liberate the €9 million of the TV incomes, both sides even agreed that in case the money isn’t unfrozen, then it should be paid to the AEAT in order to reduce the debt.

So, it isn’t expected any problem at the moment of reaching an agreement with the AEAT regarding the payment of the debt, the only thing to solve is if the government will accept to collect the €93.7 million in twenty years as the club proposed, in past opportunities the members of the Tax Agency have said that they want to collect the money owed by the Spanish clubs in the next ten years, though they already negotiated longer terms with other clubs, like the case of CA Osasuna.

ARCHIVE NEWS JUN/13

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