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Feb 14, 2014

Monaco hit back at tax break criticism

Monaco and the French Football League (LFP) have reacted angrily to the seven clubs contesting the compensation agreement struck between the pair.

Clubs challenge Monaco tax break

Monaco and the LFP had reached a deal on the principality club paying 50 million euros to offset the financial benefits they enjoy in comparison to their French-based rivals.

In a press release published on Thursday, a heavyweight group of clubs, including Paris Saint-Germain and Marseille, declared their intention to have the deal annulled, a move which brought a rapid response from Monaco.

"Our first reaction is to express our surprise at this letter. Democracy has always guided the workings of the French football authorities," the club stated in a press release. "The discussions with the LFP were held within a legal framework, a vote with a large majority (16 votes) in favour of this agreement was registered. We can therefore only express our stupefaction to see that it can be called into question a few days later."

LFP president Frederic Thiriez was equally robust in defence of the agreement, which came about in response to his own body's demand all clubs participating in their competitions be based in France for tax purposes by the end of the current season or face exclusion.

"Our bodies worked in a perfectly ordinary and democratic way," Thiriez wrote in a letter to clubs. "That five clubs were in the minority during the vote, having had ample opportunity to express their point of view, does not now authorise them to bring the procedure into question."

Monaco's privileged financial status, which stems from political agreements between the principality and France, means foreign players at the club do not pay income tax while state contributions are significantly lower than just across the border. In addition, French-based clubs now also have to pay the one-off tax of 75 percent on all earnings over one million euros, which hits the biggest names hardest.

"Monaco has been in the French league for 80 years, but that was during a time when there weren't the ill effects of the Bosman ruling," Bordeaux president Jean-Louis Triaud, whose own club also backed the move against the LFP agreement, argued on RMC.

"Teams were limited to three foreigners. Now they can have as many as they want. Also, the salaries and state charges were not the same. Now, if a player earns 100,000 euros at Monaco, it costs Monaco 110,000 euros. At Bordeaux, it would be 280 or 290,000 euros all included."

Triaud claimed the 50 million euro payment represented just a single season's benefits for Monaco, and suggested a compromise agreement could be for the club to be restricted to exclusively signing French players, who would be subject to French tax laws.

"The best solution would be for them to be based in France for tax purposes. That would be ethical in sporting terms. But if everyone can reach an agreement on compensation for their real advantages, why not?" Triaud said before defending the move of the dissenting seven clubs. "We didn't like the form of this agreement, and it seems ill-founded. We didn't like the content either. It's legitimate."

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