AXA Wealth International head of proposition Simon Willoughby looks at what football teaches us about tax fairness.
For those of us of a certain age, mention the name Falcao and you'd be forgiven for vaguely recalling a rather bizarre euro-hit Rock Me Amadeus that topped the charts in March 1986. Nice try but unfortunately that was Falco, an Austrian one-hit wonder, who never charted again after 1986.
However, the Falcao who has been hitting the headlines over the past few weeks is a 27 year old Columbian footballer who has been playing for Atlético Madrid, but has recently been the subject of a €60m (£51m) transfer to Monaco.
A lot of money you might say, but nothing too unusual on the face of it for the world of football and one of Europe's top goal scorers last season.
However, if you lift the bonnet on the personal tax implications of this move, you begin to see why it has generated as many column inches on the financial pages, as well the sports pages of late.
First, let's consider Radamel Falcao himself. He's 27, at the peak of his professional career and based on the 2012/13 season alone, probably the hottest property in Europe right now.
In short Falcao is the most sought after striker in Europe and as such he could have the pick of any club of his choice. Chelsea agreed to meet the €60m buy-out clause, Barcelona were interested and Real Madrid would have been too if it were not for the fact that Falcao played for their arch rivals Atlético Madrid.
What was the appeal of Monaco then? Monaco has just been promoted from France's Ligue 2, it is a club owned by the Russian Dimitri Rybolovlev - the 119th richest person in the world according to Forbes magazine. Monaco has average crowds of just over 5,000 per game and will not be playing in the Champions League next year, the pinnacle of European football. Based on this, cynics would argue the decision to move to Monaco has little to do with football and more to do with tax.
In Monaco, Falcao will pay virtually no income tax compared to a top rate of 52% in Spain, 45% in the UK and 75% if he was in mainland France.
The disparity in tax levels compared to France has provoked a ferocious conflict between the French Football Association (FFF) and Monaco.
This row has at its heart the principle of a level playing field with rival French football clubs, envious of the unique tax privileges enjoyed by Monaco under a long standing treaty that allows non-French residents to pay no income tax and allowing Monaco to attract the likes of Falcao.
The FFF has allowed Monaco to be part of French football for many decades, but now the national body is demanding that they pay €200 million for the privilege of continuing to play in France.
The French Professional League (LFP) has also voted to alter its statutes so that Monaco would have to switch their administrative centre to France by June 2014, and pay tax there, or else face expulsion from the league. Monaco responded by threatening to join the Italian league and to see the FFF in court.
Compromise may well yet make a late substitute appearance as the new football season in France gets closer, but the Falcao transfer and the FFF reaction to the privileged tax status of Monaco tells us that perceived unfairness of tax treatment perhaps has rather less to do with the absolute rates of tax payable in different jurisdictions, and more to do with the widening disparity between them.
The tax arbitrage enjoyed by Monaco is nothing new, but the current disparity between 0% and the 75% level tax Falcao and others might otherwise expect to pay in France not unsurprisingly grates, especially when it can distort the market and create a less than level playing field.
It seems that equal misery for all is more politically expedient in these austere times.
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