Financial framework, tax threats: a lawyer on the difficulties of football teams when transferring players.

A lawyer on the problems faced by Ukrainian football teams in the process of sports transitions of players.

The transfer of a football player is not only a change of team: it is difficult an activity that consists of negotiations, deals and involves large sums of money. In the course of transfers, Ukrainian football clubs may face a large number of legal, economic and procedural problems related to both domestic and international regulation of sports transfers. Andriy Shabelnikov, managing partner of the EvrikaLaw law firm, head of the committee of the National Association of Lawyers on investment activities and privatization, informed the Informant about this.

Therefore, when we hear the expression “player transferred to another team”, behind it lies a large field with rules, markets and multi-million dollar deals. Regarding the main problems that may appear, it is worth noting the following:

• Legal settlement of this issue: the key document that regulates transfer relations is the Regulations of the Ukrainian Football Association on the Status and Transfer of Football Players, as well as the FIFA Regulations on the Status and Transfer of Players (FIFA Regulations on the Status and Transfer of Players). However, in connection with this, there may be difficulties in harmonizing “national” norms with changes in international regulation, which may create corresponding risks in the process of transitions (non-recognition of the transition or the emergence of disputes)
• Financial constraints: due to the fact that Ukraine is currently under martial law, the National Bank of Ukraine has imposed restrictions on currency transactions, which can potentially complicate the way of paying contributions to foreign clubs, agents, and players abroad.
• Termination of agreements in connection with the operation of martial law on the territory of Ukraine: since the start of the full-scale invasion, FIFA has adopted some temporary provisions that allow foreign coaches to terminate or terminate contracts with Ukrainian clubs, given the current situation in the country. Such changes also affected transfer activity and caused corresponding losses for clubs.
• Registration difficulties in FIFA TMS (Transfer Matching System). Currently, a system called FIFA TMS (Transfer Matching System) is used for international transfers. Given possible technical malfunctions or documentation issues, as well as incomplete mastery of the process and system, Ukrainian clubs may face delays or problems in confirming the player’s transfer, which will affect his participation in matches.
• Tax and labor hazards. Currently, Ukrainian legislation does not provide for a special form of employment “sports” contract, therefore football contracts are concluded as ordinary civil law agreements. As a result of such a gap in the legislation, there are certain difficulties in determining tax obligations, in particular when paying personal income tax, VAT.

“Thus, Ukrainian football clubs now face a large number of difficulties in the process of transferring players, which are related to various factors. However, in order to reduce or avoid the above-mentioned risks altogether, Ukrainian football clubs must pay attention to important aspects: attracting certified agents, paying due attention to the compliance of agreements with international standards, compliance of the documents used in the transfer process established by “national” and international norms, involving in their activities specialized legal experts who will help to understand the problems and avoid unwanted risks”, Shabelnikov emphasized.

Ukraine is in the top 15 countries in terms of the cost of transfers of its pupils As “Channel 24” recently reported, the International Center for Sports Research (CIES) published a list of 50 countries whose clubs received the most profit over the last ten years from international transfers of players-students. The first place is expected to be France, which sold its football players for almost 4 billion euros. Brazil is second (2.6 billion euros), Spain, Portugal and the Netherlands are also in the top 5. Ukraine ended up in a good 15th place. Domestic clubs sold players abroad for the amount of 339 million euros. The main “positions” were Mykhailo Mudryk (from Shakhtar to Chelsea for 70 million euros) and Ilya Zabarny (from Dynamo to Bournemouth for 33 million euros).

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