A VAT cash-out for a club and a wage tax for a trainer on a trainer’s transfer fee? The Belgian courts decide.

December 3, 2021

#sportslaw #VAT #socialsecurity #transferfees

Friday 3 December 2021 – Who would have thought that the transfer of a trainer from one football club to another could lead to two separate legal disputes before the Belgian courts? Well, this is exactly what has happened. After the Belgian Employment Appeal Court ruled that a transfer fee paid for a trainer constituted salary in 2020, the Ghent Court of Appeal has now had its say about the VAT aspects.

Factual context

In 2014, a Belgian football trainer concluded a contract with a Belgian football club. That contract was renewed in April 2016 to become a contract lasting until 30 June 2018. However, shortly after the contract renewal, the trainer signed a contract with another Belgian football club. The second club started negotiations with the first club, which led, by mutual agreement, to the dissolution of the renewed contract and to a severance payment of €200,000, which was invoiced with 21% VAT. This situation came to the attention of the Belgian social security authorities, who then passed on their findings to the Belgian VAT authorities, who in turn started a separate investigation.

The subject of the legal disputes has been as follows:

  • The social security authorities claimed that the fee of €200,000 paid by the new club found its origin in the renewed labor contract he had with its former club, triggering an advantage (i.e. wage) for the trainer. On this advantage, the social security authorities assessed a social security tax.
  • The trainer’s new club had been invoiced the €200,000, which was increased by 21% VAT, and had then recovered this amount via its Belgian VAT return. However, the VAT authorities qualified the transfer fee as an indemnity outside the scope of VAT. According to the VAT authorities, no VAT was due for the fee and so the VAT was not recoverable. The VAT authorities claimed back the input VAT, which was increased with a penalty (10%) and late payment interest (9.6% per year).

Social security and VAT: different approaches

In the social security case, the Brussels’ Employment Court of Appeal ruled that the severance fee indeed was to be seen as wage for the trainer, over which the first club therefore had to pay social security contributions. Since the first club had omitted to withhold in time the employee social security taxes and to pay employer’s social security taxes, the first club was held liable to pay the full amount for the social security arrears. It should be noted that the first club continues to oppose this ruling and so the case is currently pending before the Belgian Supreme Court. This case is being monitored closely by other Belgian clubs as, should the ruling be upheld, this could have a significant impact for clubs looking to secure talent (both coaches and players) since payments made to secure such talent could be subject to social security taxes in the future. This is even more a concern given the reform of the applicable social security regime for players, which is scheduled to take effect from 1 January 2022.

In the VAT proceedings, the Ghent Court of Appeal ruled that the VAT authorities had wrongfully decided that the transfer fee qualified as an indemnity. The VAT authorities’ sole ground for this point of view was an older administrative decision in which the VAT authorities had acknowledged that the transfer fee of a player qualified as a VAT taxable service. Given that the decision only mentioned players and not trainers, the VAT authorities had taken the view that a trainer’s transfer did not qualify as a VAT taxable service. The Ghent Court of Appeal dismissed the VAT authorities’ argument and said that there was no reason to differentiate between the VAT treatment of a player’s and a trainer’s transfer fee. Therefore, the club was entitled to recover the VAT paid on the trainer’s fee.


These are two highly interesting cases and, while the outcome of the VAT case was expected, the result of the Supreme Court proceedings is keenly awaited. If the Brussels Employment Court of Appeal’s judgment is confirmed, then unwanted tax consequences could follow for clubs and trainers, and perhaps even players.

If you find yourself in a similar situation, it is highly advisable to analyse what the potential implications could be. Our team is available to assist with such analysis and advice.

For this article, the ATFIELD team was able to rely on the dedicated assistance of Gert Vranckx (gert.vranckx@tiberghien.com), Senior Associate at Tiberghien Lawyers.