The FIA threatens to leave its Paris headquarters without a change in its tax status
The FIA and FIFA, two major institutions headquartered in Paris, are considering leaving the country, not least because of France's excessive tax burden.
Paris is the historical headquarters of the FIA (International Automobile Federation). This year, it celebrates the 120th anniversary of its founding in the capital. It also has offices in Switzerland, in Geneva.
To continue growing and remain in Paris, the FIA would like to have a specific legal status for international federations. This is not currently the case. The organization participated in a series of debates organized by Sporsora, an interprofessional organization that helps develop the sports economy. On this occasion, Mohammed Ben Sulayem, the president of the FIA, mentioned some difficulties. While the threat of leaving is not official, it is evident that the situation is tense.
Although France is the birthplace of motor racing, international competition, especially in terms of labor costs, and the globalization of the sport, weaken this position, explains Xavier Malenfer, Director of Institutional and International Relations at the FIA in a joint statement released on Wednesday, April 24th.
He goes on to say that: « Without clarification, by recognizing a specific status for international sports federations, there is little hope of seeing FIA activities develop further despite all the undeniable advantages of Paris. »
The French executive had tried, at the end of 2023, to include in the 2024 budget a law with tax provisions to attract to France, international sports federations recognized by the IOC, starting with football. But last December, the Constitutional Council censored the advantageous tax regime, citing equality before tax. This discouraged the establishment of certain federations.
No separate legal status
The FIA is not the only one with demands, it is also the case of FIFA, which recently set up its offices in Paris, Place de la Concorde as well, even though its headquarters remain in Switzerland. One of the leaders of the International Football Federation, Kenny Jean-Marie, was vehement in emphasizing that sport bashing and demagogy around tax issues must stop.
Sporsora has indicated that around forty federations are currently based in Switzerland, primarily for tax reasons, and highlights the efforts of certain countries to attract them, notably Hungary, which is home to the international judo federation.
« The major brake identified for this French attractiveness: the absence of a specific legal status for international federations. Under French law, they indeed have the status of associations, and cannot be considered as either international organizations or companies. This has concrete consequences on their activities, taxation, and, ultimately, on their interest in being in France, explain the organizations. They demand more clarity and visibility from France regarding the legal, social, and tax regime that would apply to them. »
« Making France a welcoming place for international federations is essential to contribute to the development of the sports economy and the attractiveness of our country far beyond sports, » requests Magali Tézenas, general director of Sporsora, who explains that: « The competition from other European countries is strong, let’s try not to miss out on this opportunity. »
The press release specifies that the two institutions provide significant benefits to France by being present on its territory: « Economic Activity […] Jobs […] Francophonie Sportive […] Sport Events […] Influence and Diplomacy. »
He thus proposes concrete ideas and suggestions to implement: « Provide clarity and visibility to international sports federations regarding the legal, social, and fiscal framework that would apply to them. The current situation is not satisfactory as it stands, and the specificity of activities carried out by international federations easily justifies the proposal of a “special status”. Taxation: the mechanism proposed and tested in the parliamentary amendment to the PLF2024 concerning the tax status of international federations was encouraging. But not necessarily sufficient. “International sports federations do not ask for extraordinary privileges, or to be treated better than other types of organizations, but not less well either,” explains Kenny Jean Marie (FIFA). » concludes the statement.
