Ander Herrera is a Manchester United Player!

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He's quality, but if we have to pay £40m, is he really worth that? That's more than what we paid for Mata.
 
Good explaination of Spanish release clauses from here.

The exercising of buy-out clauses does not always result in the signing of a player. Multiple outlets reported that Ander Herrera of Athletic Bilbao had received interest from Manchester United. Herrera’s contract included a $47.3m (€36m) buy-out clause. Despite contradicting reports regarding Manchester United’s actual interests in the footballer, the situation shed light on Spain’s rules regarding the option. Essentially, it is the player, not the purchasing club, who is required to deposit the fee with Spanish football authorities. Despite the offers made, Athletic Bilbao was not interested in transferring Herrera unless required to do so had the buy-out clause been met.

It is the requirement that the player pay the buy-out fee that initiates the tax liability in Spain. Had Herrera been released from his contract, he would have become responsible for a tax liability of $7.02m (£4.5m) to repay the tax relief that is granted to players representing clubs in the Basque region of Spain.

- See more at: http://www.businessofsoccer.com/201...transfer-fees-and-wages/#sthash.uxUnbwXa.dpuf
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YzWayne said:
Is there a difference if we pay the buy out clause and Herrera paying himself?
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We can't pay the buy-out, only the player can. generally, player's don't have 36 million lying around in loose change to buy themselves out of their contract, so we'll need to pay the player and he'll pay the buyout. The problem is that as soon as we pay the player this money, it gets counted as his income and he becomes eligible to pay income tax on it. That's why we directly offered the amount equivalent to his buyout clause to Athletic which they have rejected.
 
Hellboy said:
Why are you lot blaming the club ? :lol:

Bilbao are known for this, hopefully we'll push this through.
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Yup. I hope our lot are just as ruthless and dodgy as the Bayern boys were in getting Martinez.
 
Summit said:
Yes. Ander can pay himself and he won't be taxed on it. But where does he get the money?
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We can just come up a staged lottery and let Ander wins it.

Another thing, why can't we pay more than the buy out clause to Bilbao and avoid the taxes? For an example if the taxes is 2m, we can just pay 37m to Bilbao and save 1m?
 
YzWayne said:
Can someone enlighten me?

Ander has a release cause of 36million.

We offer Bilbao 36mil (no tax) to completed the transfer but was rejected. They insist us paying the release cause + taxes to get him. Is this right?
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we have no confirmation of this, but it seems likly as that is exacly what happened with martinez too bayern
 
Just to be tedious on the release clause thing. There is only one case of a Spanish club (or player) having to pay tax on the deal. It is very difficult to get clear case law on the subject because the actual forced release clause mechanism is almost never used - as it can be troublesome for both the buyer and the seller.

The reason there is ambiguity is because the law itself is ambiguous. I'll leave this in Spanish because the specific interpretation of the words is critical.
El art.2.2 del Libro V dice: “La inscripción de un jugador profesional a favor de una Sociedad Anónima Deportiva o Club será cancelada por la rescisión unilateral del contrato por parte del jugador profesional. En este caso, y si estuviera previsto tal desestimiento con cláusula indemnizatoria en el contrato que dio lugar a la inscripción, se procederá a su cancelación, previo depósito en la LNFP del importe previsto en la indemnización”.

What that appears to say (and why you need specialist lawyers) is that a player can unilaterally cancel his contract. However, it then says that when his old club receives the prescribed compensation his registration can be transferred to his new club. It does not say explicitly that the player must hand over the money himself. Because of this vagueness, lawyers can step in and earn a healthy fee at this point, and then the buying club can hand over the cash on the player's behalf, without the player ever possessing it himself.

The Spanish LFP agreed during the Bayern/Martinez case that the clause should be interpreted as a release clause as described by FIFA.
If a professional is required to pay compensation, the professional and his new club shall be jointly and severally liable for its payment. The amount may be stipulated in the contract or agreed between the parties.

Which again is interpreted as meaning the club can pay the money without the player touching it.

Any lawyers/tax advisors on the board will know this is the contract law equivalent of a minefield for the club/player and a goldmine for the lawyers. As I say, actual case law (as in cases that have gone into tax arbitration or into court) is basically non-existent. So any club using it will be very wary and will probably put an insurance policy in place if the amounts involved are large.

Here endeth the ramble.
 
People outraged by this are hilarious, no one even know if this was expected or not, have some patience.
 
This is so unlike United to feck up a transfer, right? Haha. Athletic Bilbao don't accept bids, this is a well known fact. The only way United or any club will sign a player from them is IF the player HIMSELF deposits the release clause sum to the Spanish Football Authority, which will in effect break him away from his contract. United should have known this, and should have gone straight up to do it this way, it is the only way. How a seasoned former professional banker couldn't do his due dilligence on this is beyond a joke. Idiot.
 
YzWayne said:
We can just come up a staged lottery and let Ander wins it.

Another thing, why can't we pay more than the buy out clause to Bilbao and avoid the taxes? For an example if the taxes is 2m, we can just pay 37m to Bilbao and save 1m?
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Well I suppose we could, but I doubt Bilbao would accept.
 
Interval said:
The way I understand it, and I could be wrong here is that we offered to pay Atletic EUR36 million to avoid the tax crap. Remember, there would be no problems of a buy-out if Atletic just accept the offer. If we're forced to pay the 36 million as buy-out, we'd have to cover Hererra for the tax component which will add another 40% making it 50million EUR, something we wont do.
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There are two ways to buy out. Either through the player or directly with the club through the Spanish Federation. Buying out through the player would cost the 40% tax, so I think United will go the direct route. That will possibly just cost the VAT.

steeeb said:
There is a way round it to not pay the tax that Bayern did last time, but is very complex, as you say - we would have offered them the money to not to have to do this, they rejected it publicly so now it's time to take that route.
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The VAT I mentioned is subject to arbitrary approval from tax authorities. Bayern got lucky because somehow the tax authorities decided it wasn't VAT liable. A lot of people criticized that decision. Other people might not be so lucky. Hopefully United get lucky as well, or we perhaps get some under table money to some tax regulator who will stamp this as not tax liable.

BTW guys, Spanish VAT is apparently 21%. :wenger:
 
I would be very surprised if this was anything other than well anticipated. We've been looking at the guy for 3 years, we will be well aware of how it all works surely.
 
It's still going to happen guys, whether this week or next.

No way Herrera will go as far as coming to England, unless he knows it's a 95% done deal.
 
This is the same snag we hit last year on transfer deadline. I would be extremely surprised if we haven't planned for this and have a contingency plan in place.
 
Roux said:
How is this our fault?
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Bilbao are not a normal club. Their Basque only policy means they'll fight tooth and nail to keep players, even more so now they're in the Champions League. We shoudn't be bringing players around Carrington without first being damn sure that the transfer is done.
 
Can't we just sign someone from Zaragoza to keep them sweet. :nervous:
 
Cina said:
the extra €1.6m triggers the tax clause so clearly it is a tax issue.
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Not if the fee is going direct to Zaragoza. If United & Herrera do it the Javi Martinez way and pay the clause 'between' them the transfer fee isn't taxable as the entity paying the fee isn't a individual therefore not taxable.
 
jojojo said:
Just to be tedious on the release clause thing. There is only one case of a Spanish club (or player) having to pay tax on the deal. It is very difficult to get clear case law on the subject because the actual forced release clause mechanism is almost never used - as it can be troublesome for both the buyer and the seller.

The reason there is ambiguity is because the law itself is ambiguous. I'll leave this in Spanish because the specific interpretation of the words is critical.
El art.2.2 del Libro V dice: “La inscripción de un jugador profesional a favor de una Sociedad Anónima Deportiva o Club será cancelada por la rescisión unilateral del contrato por parte del jugador profesional. En este caso, y si estuviera previsto tal desestimiento con cláusula indemnizatoria en el contrato que dio lugar a la inscripción, se procederá a su cancelación, previo depósito en la LNFP del importe previsto en la indemnización”.

What that appears to say (and why you need specialist lawyers) is that a player can unilaterally cancel his contract. However, it then says that when his old club receives the prescribed compensation his registration can be transferred to his new club. It does not say explicitly that the player must hand over the money himself. Because of this vagueness, lawyers can step in and earn a healthy fee at this point, and then the buying club can hand over the cash on the player's behalf, without the player ever possessing it himself.

The Spanish LFP agreed during the Bayern/Martinez case that the clause should be interpreted as a release clause as described by FIFA.
If a professional is required to pay compensation, the professional and his new club shall be jointly and severally liable for its payment. The amount may be stipulated in the contract or agreed between the parties.

Which again is interpreted as meaning the club can pay the money without the player touching it.

Any lawyers/tax advisors on the board will know this is the contract law equivalent of a minefield for the club/player and a goldmine for the lawyers. As I say, actual case law (as in cases that have gone into tax arbitration or into court) is basically non-existent. So any club using it will be very wary and will probably put an insurance policy in place if the amounts involved are large.

Here endeth the ramble.
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Yep. We've basically said here is your 36m, you'll end up getting that anyway lets make things easy. Bilbao don't negotiate to them it's about pride and all that shit. They're forcing us to activate the clause, just because.
 
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