FIFA’s Justification for Requiring Tax Exemptions from World Cup Host Countries

Author: Gustavo Leal Cueva

To award the hosting rights for a FIFA World Cup, FIFA requires interested governments to provide a series of government guarantees. These guarantees cover immigration matters, work permits, security, telecommunications, protection of commercial rights, administrative assistance and, particularly relevant for this analysis, tax benefits.

The object of this analysis is the tax-exemption guarantee, structured as “Government Guarantee #3” (3. Government Guarantee #3: Tax exemptions and foreign exchange undertakings). In the bidding process for the FIFA World Cup 2026 (and in prior bidding processes), the organization requested from host governments a structured, broad and tiered tax-exemption framework applicable not only to FIFA, but also to its related entities, host associations, confederations, member associations, suppliers, contractors, broadcasters and certain designated individuals.

This is not, therefore, a simple administrative facility or an isolated exemption. FIFA’s framework seeks to prevent the organization of the World Cup from generating direct or indirect tax burdens for FIFA and for the parties involved in the preparation, operation and closing of the event.

The underlying question is whether these tax demands have sufficient technical justification or whether, in the current context of combating preferential regimes and base erosion, they constitute a privilege that is difficult to sustain.

I. The tax-exemption framework required by FIFA

The government-guarantee document structures the tax benefit through a logic of concentric circles. The closer an entity is to FIFA’s operational core, the broader the requested tax benefit. FIFA itself graphically describes this architecture through a circle diagram, with FIFA, the event entity and its subsidiaries at the center and, moving outward, associations, suppliers, contractors and designated individuals (FIFA, 2017).

Source: Overview of Government Guarantees and the Government Declaration (FIFA)

1.1 First circle: FIFA and its related entities

The first circle is the broadest. FIFA requests a general tax exemption for:

• FIFA

• The 2026 World Cup entity

• The 2026 World Cup subsidiaries

• Any other FIFA subsidiary

The exemption period begins upon designation of the host country and ends on December 31, 2028, unless it must be extended for payments related to the World Cup legacy program.

The scope of this exemption is extraordinary. FIFA requests that it cover “all taxes” applicable in the host country. The only express exception concerns the sale of tickets to third parties, for which FIFA accepts VAT, sales tax or an equivalent tax, but with a unified maximum rate of 10%. Even in that case, FIFA states that no other taxes should be charged on the revenue or profits derived from ticket sales (FIFA, 2017).

From a technical perspective, this first circle is equivalent to near-total tax immunity for FIFA and its main entities throughout the entire World Cup cycle.

1.2 Second circle: Host associations, confederations and member associations

The second circle comprises the host associations, co-host associations, continental confederations and FIFA member associations.

Here, the exemption is also general, but limited to taxable events directly or indirectly related to the competition or associated events.

FIFA’s justification is that these entities receive financial or in-kind support to perform functions related to the organization of the tournament. Therefore, if such support were taxed, the tax would ultimately become an indirect tax cost for FIFA.

This point reveals a central feature of the model: FIFA seeks not only to avoid its own taxes, but also to prevent taxes incurred by third parties from being economically passed on to it.

1.3 Third circle: Host broadcaster and FIFA suppliers

The third circle refers to the FIFA Host Broadcaster and FIFA service providers.

The requested exemption is limited and covers the period from January 1, 2022 to December 31, 2027.

FIFA argues that the World Cup requires goods and services specifically designed for the event, with guaranteed-cost structures, cost-plus mechanisms, margins or profit-sharing formulas. On that basis, it maintains that taxing the supply of those goods and services would generate indirect tax costs for FIFA or its related entities.

The document itself introduces a relevant clarification: this exemption should not prevent the ordinary taxation of these suppliers’ profits or of their employees’ salaries (FIFA, 2017). This clarification is important because it prevents the conclusion that every FIFA supplier is automatically exempt from income tax, VAT or labor-related contributions.

1.4 Fourth circle: FIFA contractors

The fourth circle comprises contractors other than the host broadcaster and FIFA suppliers.

The exemption is also requested for the period from January 1, 2022 to December 31, 2027.

Its scope focuses on taxes on:

• Importation.

• Exportation.

• Transportation of goods and services.

• Transfer of rights related to the competition.

FIFA mentions three types of goods: consumable goods, durable goods imported temporarily and durable goods that remain in the host country as donations to qualified third parties.

The operational rationale is clear: during the World Cup, large quantities of goods are imported and distributed within a short period. However, the tax risk is also evident: a logistical facilitation regime may become preferential treatment for commercial contractors if it is not precisely delimited.

1.5 Fifth circle: designated individuals

The fifth circle refers to certain designated individuals. FIFA requests three main benefits.

First, salaries and payments made by foreign entities to non-resident individuals — except players — should be exempt if such individuals enter and leave the host country within the period beginning 35 days before the first match and ending 35 days after the final. FIFA argues that this rule is consistent with the 183-day rule under Article 15 of the OECD Model Tax Convention (FIFA, 2017).

Second, with respect to players, FIFA asks to limit taxation to the base compensation and bonuses paid by member associations for their participation in the competition. The stated objective is to avoid complexity and uncertainty under Article 17 of the OECD Model Tax Convention, which concerns entertainers and sportspersons.

Third, FIFA requests that any cash or in-kind compensation granted to volunteers be exempt. The justification is that volunteers do not receive a salary in the strict sense, but rather uniforms, meals, reimbursements, per diem allowances, access to events or minor compensation.

The document also clarifies that, except in the case of volunteers, it is not intended to grant tax benefits to resident individuals. Local employees of FIFA, its subsidiaries or host associations should remain subject to the ordinary regime.

1.6 Foreign-exchange undertakings and administrative facilities

In addition to tax exemptions, FIFA requests foreign-exchange undertakings.

The host government must guarantee the unrestricted import and export of currency through bank transfers, as well as the free conversion of currencies into local currency, U.S. dollars, euros or Swiss francs, without taxes and under market conditions.

FIFA clarifies that this guarantee does not limit anti-money-laundering rules. The clarification is relevant because it distinguishes operational foreign-exchange freedom from financial compliance.

Finally, FIFA requests simplified administrative procedures, priority attention from competent authorities and the possibility of submitting applications, documentation and communications in English.

This last point confirms that the requested regime is not only substantive but also procedural: FIFA seeks not only to pay fewer taxes, but also to comply with fewer administrative burdens or to comply with them under preferential conditions.

II. FIFA’s general justification

FIFA bases its request on its legal nature and statutory purposes.

The document states that FIFA is an association governed by Swiss law and that, under Swiss legislation, an association may not distribute dividends or similar shares to its members. Consequently, its profits must be used in accordance with its statutory purposes.

FIFA also maintains that its main objectives are the development of football and the organization of related events. To fulfill those purposes, it requires an administration funded through global revenues.

Under this logic, FIFA presents itself as a non-profit entity, although it acknowledges that the global revenues it generates remain subject to the ordinary Swiss regime applicable to associations.

Its central argument is that any tax cost imposed on FIFA, the World Cup entity or its subsidiaries could limit its ability to finance the organization of the event and its other statutory activities. The idea appears in the document when it states that local taxes “may limit FIFA’s ability to finance” its statutory activities (FIFA, 2017).

This justification has a certain internal logic. If FIFA does not distribute profits and reinvests its revenues in its institutional purposes, it may argue that the tax burden reduces the resources available for the development of football. However, that explanation does not exhaust the analysis. The non-distribution of profits does not eliminate taxable capacity, nor does it automatically turn a global organization into a fiscally immune taxpayer.

III. The economic argument behind the exemptions

In addition to the institutional justification, FIFA puts forward an economic argument.

According to the document, the World Cup attracts global attention to the host country and offers opportunities for investment in sports and public infrastructure. That attention and investment could generate medium- and long-term socioeconomic benefits, as well as economic growth.

On that basis, FIFA maintains that the World Cup is an event of national importance and public interest, which would justify granting a tax exemption related to the competition (FIFA, 2017).

This argument follows a logic of exchange: the host country forgoes a certain amount of direct tax revenue in exchange for indirect benefits such as tourism, consumption, international promotion, temporary employment, infrastructure investment and global exposure.

The problem is that the existence of an economic spillover does not, by itself, prove that the exemption is necessary, proportionate or efficient. The correct tax analysis is not whether the World Cup generates economic activity, but whether the magnitude of the tax benefit granted is proportionate to the real and verifiable public benefits.

IV. The real financial logic of FIFA’s model

The tax framework requested by FIFA has a clear financial purpose: to protect its global revenues and avoid direct and indirect tax costs.

The organization does not only seek to ensure that its own revenues are not taxed. It also seeks to prevent taxes applicable to associations, suppliers, contractors, broadcasters or individuals from being economically passed on to FIFA.

This is why the framework expands toward third parties. The exemption is not limited to FIFA’s core, but covers different levels of the World Cup’s operational chain.

Technically, this architecture may be explained as a strategy for tax neutralization of the event chain. FIFA seeks to ensure that the host country does not generate tax frictions that increase costs, reduce margins or complicate operations.

However, from the host country’s perspective, that neutralization implies a broad waiver of tax revenue. The State provides infrastructure, security, mobility, commercial protection, administrative services and regulatory facilities, while waiving the right to tax a significant portion of the economic flows derived from the event.

V. From tax coordination to tax privilege

One thing would be to request rules to avoid double taxation, simplify temporary imports, facilitate procedures for non-residents or coordinate cross-border tax obligations.

It is quite another to demand a general exemption from all taxes for FIFA and its main entities, plus tiered exemptions for associations, suppliers, contractors and individuals.

At that point, the framework exceeds the logic of tax coordination and approaches the logic of tax privilege.

This is not to deny that a global event requires special rules. The problem lies in the breadth of those rules and in their asymmetrical character: the host country assumes significant public costs while the global organizer seeks to fiscally shield its income and operations.

VI. Tension with the current international tax standard

FIFA’s demand is especially striking in light of the current international tax context.

Over the last decade, the OECD and the G20 have promoted the BEPS project to combat base erosion and the artificial shifting of profits. BEPS Action 5 is specifically aimed at countering harmful tax practices and preferential regimes, taking transparency and substance into account (OECD, 2015).

The OECD has explained that the Forum on Harmful Tax Practices reviews preferential regimes to identify features that may facilitate base erosion and profit shifting, unfairly affecting the tax base of other jurisdictions (OECD, 2026).

It is important to clarify that no specific OECD statement has been identified condemning the tax exemptions required by FIFA. Therefore, it should not be asserted that the OECD has declared FIFA’s framework contrary to BEPS. What does exist is an evident conceptual tension: while the international tax standard seeks to limit preferential treatment, increase transparency and require economic substance, FIFA demands from host countries a specific, negotiated and selective tax regime for a global event.

Although FIFA exemptions are not identical to an offshore regime or an intellectual-property box, they share one problematic element: they grant tax advantages to specific parties because of their international bargaining power.

VII. Does the non-distribution of profits justify not paying taxes?

One of FIFA’s most important arguments is that, as a Swiss association, it does not distribute dividends. That argument is insufficient.

The non-distribution of profits does not eliminate taxable capacity. Many non-profit entities may be subject to tax rules, formal obligations, withholding requirements or indirect taxes, depending on the nature of their activities.

Moreover, the World Cup generates significant commercial revenues from broadcasting rights, sponsorships, licenses, hospitality, ticketing and brand exploitation. The fact that those revenues are later allocated to statutory purposes does not change the fact that they are generated through a highly profitable global economic activity.

The relevant question is not whether FIFA distributes dividends. The question is whether it obtains income and carries out economic acts in the host country. If the answer is yes, there is a tax reason to analyze its contribution to the public expenditure of that jurisdiction.

VIII. Does taxation in Switzerland eliminate the host country’s taxing right?

FIFA also maintains that its global revenues are subject to the ordinary Swiss regime. That argument also does not, by itself, eliminate the host country’s taxing power.

In international taxation, residence and source are coexisting criteria. The fact that an entity is taxed in its country of residence does not necessarily prevent the source country from taxing income, acts or activities carried out in its territory.

Tax treaties exist precisely to coordinate those rights. Their function is not to absolutely suppress source-country taxing power, but to allocate, limit or coordinate it.

If the issue were merely the avoidance of double taxation, the ordinary solution would be to rely on treaties, foreign tax credits, specific source rules or coordination mechanisms. A general exemption from all taxes in the host country appears to go beyond that purpose.

IX. Public interest should not be confused with tax immunity

The World Cup may be an event of public interest. It may generate tourism, consumption, temporary employment, investment and international projection. But public interest does not automatically make the organizer fiscally immune.

On the contrary, if the event uses public security, infrastructure, mobility, administrative services, telecommunications, trademark protection and regulatory support, there is a reason for those who capture economic value from the event to contribute, at least partially, to financing those costs.

From a tax-policy perspective, the rule should be restrictive: tax benefits should only be justified when they are necessary, transparent, temporary, quantified and proportionate to the public benefit they generate.

X. International observations and criticism

Although the OECD has not issued a specific condemnation of FIFA’s tax exemptions, the organization’s demands have been the subject of analysis and criticism by specialized media, tax-policy organizations and international mechanisms for business responsibility.

International Tax Review documented as early as the South Africa 2010 World Cup that FIFA required tax concessions from host countries, including relief for FIFA, its subsidiaries and participating foreign associations (International Tax Review, 2010). This observation shows that the tax demand is neither new nor exclusive to 2026, but rather a recurring practice in the organization of World Cups.

In the United States, the Institute on Taxation and Economic Policy has questioned the local tax cost of the 2026 World Cup, particularly due to sales-tax exemptions on ticketing and other benefits that may reduce revenues for state and local governments (ITEP, 2025). Although ITEP’s analysis focuses on the U.S. context, its criticism is useful for understanding the general problem: host governments assume public costs while, at the same time, foregoing tax revenues.

The Guardian has also reported controversies over the tax treatment of the 2026 World Cup, including negotiations to obtain tax exemptions for national teams and the difference in treatment among the United States, Mexico and Canada (The Guardian, 2026).

In addition, the OECD National Contact Points mechanism has reviewed matters related to FIFA, although not specifically regarding tax exemptions. In 2015, Building and Wood Workers’ International filed a complaint before the Swiss National Contact Point for alleged human-rights violations affecting migrant workers in connection with Qatar 2022. The case was accepted for consideration under the OECD Guidelines for Multinational Enterprises (OECD, 2015/2017).

This precedent does not directly challenge FIFA’s tax policy, but it does show that the organization has been subject to international scrutiny for the way in which its hosting decisions may generate relevant public impacts. That logic is transferable to the tax sphere: if FIFA demands government guarantees that affect public resources, its conduct should also be evaluated under standards of responsibility, transparency and proportionality.

XI. Implications for Mexico

In Mexico, the Federal Revenue Law for 2026 incorporated a special regime for those participating in the organization and staging of the FIFA World Cup 2026.

The Mexican design largely reflects the architecture requested by FIFA: identification of participants, inclusion of residents in Mexico and abroad, permanent establishments, an operating subsidiary, information updates before the SAT and benefits related to acts, activities and income exclusively linked to the competition.

This makes it possible to understand that the Mexican regime did not arise in isolation. It forms part of a prior contractual structure required by FIFA within the bidding process.

However, understanding its origin does not eliminate the legal and tax questions. In Mexico, the regime must be analyzed against the principles of generality, proportionality, tax equity, legality and the constitutional prohibition of exemptions. It must also be interpreted strictly, especially due to the use of the expression “exclusively” in the Federal Revenue Law.

For Mexican suppliers, contractors, service providers and entities linked to the event, the practical conclusion is clear: the existence of the FIFA regime does not imply an automatic exemption. Each transaction must be analyzed according to the subject, the activity, the source of income, the documentation and its direct relationship with the competition.

XII. Conclusions

FIFA requires World Cup host countries to grant a broad tax framework structured in protective circles. The most intense benefit applies to FIFA and its related entities; it then extends, with varying degrees of limitation, to host associations, confederations, member associations, broadcasters, suppliers, contractors and designated individuals.

FIFA’s justification rests on its nature as a Swiss association, the impossibility of distributing dividends, its statutory purposes, taxation in Switzerland, the operational complexity of the World Cup and the expected economic benefits for the host country.

Nevertheless, from a contemporary tax perspective, those reasons do not fully justify the breadth of the requested regime.

At a time when the OECD and the G20 are promoting standards against preferential tax regimes, lack of substance and base erosion, it is questionable for a global organizer with multibillion-dollar revenues to require from host countries a tailor-made tax exemption.

The discussion should not be framed as opposition to the World Cup. It should be framed as a tax-policy question: which benefits are strictly necessary to organize a global event, and which constitute privileges incompatible with tax equity?

The answer should start from a restrictive standard: limited temporality, full transparency, quantification of the tax cost, subsequent evaluation and proportionality between the benefit granted and the public benefit actually obtained.

References

Fédération Internationale de Football Association. (2017). 2026 FIFA World Cup bidding process – Government guarantees. FIFA. https://digitalhub.fifa.com/m/502252882e0edd0e/original/ufybnq0f1kd2g1nhw5pc-pdf.pdf. Última visita en junio 15, 2026.

Institute on Taxation and Economic Policy. (2025). Not-so-free kick: How the 2026 FIFA World Cup will cost local governments. ITEP. https://itep.org/fifa-2026-world-cup-tickets-sales-tax-exemption/. Última visita en junio 15, 2026.

International Tax Review. (2010, May 19). FIFA demands tax concessions from World Cup hosts. International Tax Review. https://www.internationaltaxreview.com/Article/2612768/Fifa-demands-tax-concessions-from-World-Cup-hosts.html. Última visita en junio 15, 2026.

Organisation for Economic Co-operation and Development. (2015). Countering harmful tax practices more effectively, taking into account transparency and substance, Action 5 – 2015 final report. OECD Publishing. https://doi.org/10.1787/9789264241190-en. Última visita en junio 15, 2026.

Organisation for Economic Co-operation and Development. (2026). Harmful tax practices. OECD. https://www.oecd.org/tax/beps/beps-actions/action5/. Última visita en junio 15, 2026.

Organisation for Economic Co-operation and Development. (2017). Fédération Internationale de Football Association (FIFA) and Building and Wood Workers’ International (BWI). OECD National Contact Points for Responsible Business Conduct. https://www.oecd.org/en/networks/national-contact-points-for-responsible-business-conduct/database/ch0013.html. Última visita en junio 15, 2026.

The Guardian. (2026, April 29). All World Cup teams poised for tax exemption after FIFA talks with US Treasury. https://www.theguardian.com/football/2026/apr/29/world-cup-teams-tax-exemption-fifa-talks-us-treasury-federal-taxes. Última visita en junio 15, 2026.