Many national football federations will be subject to federal, state, and city taxes on their World Cup earnings in the United States, according to the British newspaper Guardian. This occurs despite FIFA itself holding tax-exempt status in the US since the 1994 World Cup.

FIFA has not reached a comprehensive tax exemption agreement with the United States for teams participating in the 2026 World Cup. Photo: AP

Out of the 48 participating teams, only 18 nations, predominantly European, have signed double taxation agreements (DTAs) with the United States, granting them federal tax exemption. Beyond co-hosts Canada and Mexico, Australia, Egypt, Morocco, and South Africa are the only non-European teams to benefit from this arrangement.

This disparity means smaller nations, such as Curacao and Cape Verde, could face significantly higher tax liabilities than powerhouse teams like England and France.

Under US federal regulations, players and coaches are subject to income tax on earnings while competing or working in the country, with rates potentially reaching 37%. The federal corporate tax rate is 21%. However, logistics and coaching staff from countries with DTAs may qualify for tax exemption.

Oriana Morrison, a tax consultant who has advised the Portuguese and Brazilian football federations, emphasized the substantial cost disparities. Teams from nations with tax agreements, such as England or Spain, will incur significantly lower expenses than smaller teams without such accords.

For instance, Brazil's coach Carlo Ancelotti could face tax obligations in both Brazil and the United States, whereas England's coach Thomas Tuchel would only be taxed in England.

Cape Verde players celebrate after qualifying for the 2026 World Cup. Photo: Sportsfile

Adding to the financial strain, the 2026 World Cup's expansion to 48 teams reduced the daily living allowance for delegation members, dropping from 850 USD in 2022 to 600 USD. This reduction occurs despite escalating travel and hotel costs across the United States.

Further discrepancies stem from state-level tax policies. For example, Florida imposes no income tax, while New Jersey applies a 10.75% rate, and California's can reach 13.3%. Consequently, team expenses will fluctuate based on their match locations.

In contrast, co-hosts Canada and Mexico have pledged full tax exemptions for all participating teams, alleviating financial burdens for those competing in their respective countries.

A FIFA representative declined to comment on the matter but indicated that the organization is collaborating with member federations to address tax-related concerns.

Hong Duy (according to Guardian)