Real Madrid and Barcelona among Spanish football clubs ordered to return millions in taxes

Real Madrid and Barcelona - two of the world's biggest football clubs - have been ordered to pay back millions of euros in taxes to the Spanish government, after the European Union ruled that they benefitted from illegal tax breaks.

Seven clubs in total are being ordered to hand back over €68mn in public money earned from property deals, loans and bank guarantees gave them an unfair advantage over their competition.

In a press release, the European Commission said that "public support measures granted by Spain to seven professional football clubs gave those clubs an unfair advantage over other clubs in breach of EU State aid rules."

The European Commission said that "public support measures granted by Spain to seven professional football clubs gave those clubs an unfair advantage"

The other clubs involved were Valencia, Athletic Bilbao, Osasuna, Elche and Hercules.

Brussels commissioner Margrethe Vestager said that "Using tax payers' money to finance professional football clubs can create unfair competition. Professional football is a commercial activity with significant money involved and public money must comply with fair competition rules. The subsidies we investigated in these cases did not."

The press releases cites various dealings between the clubs and the Spanish central and local governments, including a failed transfer of land from Real Madrid which did not take place, but was taken advantage of for tax purposes.

The investigations also found that Madrid, Barca, Athletic Bilbao, and Osasuna were paying a lower tax rate of 25% rather than the 30% applicable to sport limited companies.

The report stated that "EU State aid rules ensure that public funding does not distort competition between clubs. They protect the level playing field for the majority of professional clubs who have to operate without subsidies."