Labour Disputes
Texto da decisão
REF. FPSD-12802
Decision of the
Dispute Resolution Chamber
passed on 22 April 2024
regarding an employment-related dispute concerning
the player David Neres Campos
BY:
Lívia SILVA KÄGI (Brazil/Switzerland), Deputy Chairwoman
Michele COLUCCI (Italy), member
Andre DOS SANTOS MEGALE (Brazil), member
CLAIMANT:
David Neres Campos, Brazil
Represented by Breno Costa Ramos Tannuri
RESPONDENT:
FC Shakhtar Donetsk, Ukraine
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REF. FPSD-12802
I. Facts of the case
1.
On 15 January 2022, the Brazilian player David Neres Campos (hereinafter, the Claimant or
the Player) and the Ukrainian club FC Shakhtar Donetsk (hereinafter, the Respondent or the
Club) concluded employment agreement (hereinafter, the Contract) valid as from
31 January 2022 until 31 December 2026.
2.
According to the Appendix Nº 1 of the Contract, the Respondent undertook to pay to the
Claimant (hereinafter, jointly referred to as the Parties) “310,559 Euros before tax as monthly
salary, which is equivalent of 3,000,000 Euros net per year” and “1,242,236 Euros before tax,
which is equivalent of 1,000,000 Euros net, as signing-on fee”, divided in five instalments.
3.
As per clause 5.4 of the Contract, “Deduction of taxes from the Player’s salary is made in
compliance with the current Ukrainian Legislation”.
4.
On 24 February 2022, Russia invaded Ukraine.
5.
On 20 June 2022, the Parties concluded termination agreement (hereinafter, the
Termination Agreement), by way of which they declared the following:
- On 20 June 2022 FC Shakhtar Donetsk entered into a Transfer agreement with
SPORT LISBOA E BENFICA-FUTEBOL, SAD (“Benfica”) on permanent transfer of
Player’s registration to Benfica.
- The Player has successfully passed the medical examination and signed an
employment agreement with Benfica.
6.
According to clauses 1 and 2 of the Termination Agreement, the Parties agreed on the
following:
1. To terminate FC Shakhtar Donetsk Professional Football Player Contract as from
30 June 2022.
2. With regard to such early Contract termination, the Club undertakes to pay the
Player compensation in the amount of EUR 500,000.00 (five hundred thousand
Euros) after taxation, which is payable within the season 2022/2023 (i.e. until 30
June 2023 (…).
7.
As per clause 7 of the Termination Agreement, “This Agreement is an integral part of the
Contract, which is compiled in three copies, one copy for each party and one copy for the Premier
League of Ukraine.
8.
Also on 20 June 2022, the Claimant and the Portuguese club Sport Lisboa e Benfica-Futebol,
SAD (hereinafter, Benfica) concluded employment agreement.
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9.
On 2 June 2023, the Claimant put the Respondent in default requesting the payment agreed
as per the Termination Agreement and stating, inter alia, the following:
- Pursuant to the Termination Agreement, the Club undertook to pay to the Player
EUR 500,000 “net of taxes (or after taxation)” on or before 30 June 2023.
- Under Portuguese law, residents are taxed on their worldwide income, and the Player is
tax resident in Portugal because he had been living there as of June 2022.
- The tax rate income applicable on the agreed payment would be approximately 52%, and
hence “the total gross Compensation payable by the Club to the Player would be EUR 1,041,667
which corresponds to EUR 500,000 net of taxes (or “after taxation”)”.
10. On 28 June 2023, the Respondent replied to the Claimant informing, inter alia, the following:
- The Termination Agreement forms an “integral part” of the Contract, and thus “it shall be
governed, construed and interpreted in accordance with FIFA RSTP and Ukrainian law”, and
Swiss law “shall be applicable additionally”.
- As per clauses 5.1 and 5.4 of the Contract, “Deduction of taxes from the Player’s salary is
made in compliance with the current Ukrainian Legislation”.
- As per Appendix Nº 1 of the Contract, the “net” equivalent refers to the gross amount
reduced by 19,5% as per Ukrainian taxes (19% corresponding to personal income tax, and
1,5% corresponding to military tax).
- The Player acquiring residency in Portugal does not impose any additional tax obligations
on the Club, and the Player did not inform the Club about the change of the tax residency.
11. With the above communication, the Respondent, referring to the bank restrictions in
Ukraine, also requested the Claimant to confirm whether he could receive the agreed
amount to his Ukrainian bank account in Euros, otherwise “we regret to inform you that we
are unable to provide any alternative solution. In this case, the Player will have to wait until the
National Bank of Ukraine lifts the current legal restrictions enacted in response to the war in
Ukraine”.
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12. On 29 June 2023, the Claimant replied to the Respondent’s comments, stating, inter alia,
the following:
- The Club was fully aware that the Player was going to play for Benfica and eventually
become a Portuguese tax resident.
- The common intention of the Parties when entering the Termination Agreement was to
not only consider Ukrainian taxes, but also Portuguese taxes.
13. On 5 March 2024 (i.e., during the course of the present proceeding), the Respondent paid
to the Claimant the amount of EUR 500,000, as well as the relevant taxes arisen from such
payment in Ukraine (i.e., 19,5%).
14. On 26 March 2024, the Claimant confirmed having received the above-mentioned payment
informing, however, that it corresponded “to a partial payment of the amount claimed”.
II. Proceedings before FIFA
15. On 23 November 2023, the Claimant filed the claim at hand before FIFA. A brief summary
of the position of the parties is detailed in continuation.
a. Position of the Claimant
16. According to the Claimant, “Pursuant to the Termination Agreement, as an exchange for not
exercising his right to terminate the contract with just cause under Art. 7.2 above quoted, the
Club undertook to pay the player a compensation amounting to EUR 500,000 net of any taxes
during the 2022-2023 season but never later than 30 June 2023”.
17. For the Claimant it is uncontroversial that the Respondent was aware that the payment of
the EUR 500,000 net agreed in the Termination Agreement was going to take place when
the Player was already residing in Lisbon (Portugal). In this regard, the Claimant also asserts
that “Such interpretation is not just implicit considering the Termination Agreement expressly
confirms that the Player had been transferred to SL Benfica Football, SAD, as well as they had
already signed the New Employment Contract” and that “The expectation of the Player was to
receive from the Club, the Compensation plus taxes applicable in his new (Portuguese)
residence”.
18. The Claimant further argued that the Termination Agreement novated the Contract and,
consequently, “the payment of the Compensation shall evidently rely on the provisions
established in the Termination Agreement” rather than the ones in the Contract.
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19. Based on the above, the Claimant asserts that since it is undisputed that the Parties
stipulated that the agreed amount had to be paid “after taxation” as provided for in the
Termination Agreement, the relevant taxes should be added to the total sum owed.
20. The requests for relief of the Claimant, as amended, were the following:
FIRST – To uphold the claim filed by the Player;
SECOND – To order the Club to pay the Player EUR 1,005,356.38 (one million five
thousand three hundred and sixty-five Euros and thirty-eight cents) – which is
equivalent to EUR 500,000 “after taxation” – plus default interest at the rate of 5% per
annum as from 1 July 2023 until the date of effective payment; and
Alternatively, and only whether the above is rejected:
THIRD – To order the Club to pay the Player EUR 905,365.38 (nine hundred give
thousand three hundred and sixty-five Euros and thirty-eight cents) – which is
equivalent to EUR 500,000 “after taxation” – plus default interest at the rate of 5% per
annum as from 1 July 2023 until the date of effective payment.
b. Position of the Respondent
21. In its reply to the claim, the Respondent initially argued that it had not paid neither the
agreed amount nor its taxes because the Player had refused to accept the payment to his
Ukrainian bank account.
22. The Respondent further alleged that, according to the Termination Agreement, it only had
to pay Ukrainian taxes corresponding to 19,5% on top of the agreed amount of EUR 500,000
net.
23. In this regard, the Respondent disputed that the Termination Agreement had been
novated, as asserted by the Claimant, but it was rather amended as per clause 7 thereof.
According to the Respondent, the real intention of the Parties derives from the Claimant’s
behaviour, since he did not take the chance to specify in the negotiations of the
Termination Agreement the liabilities regarding Portuguese taxes.
24. The Respondent also argues that the amount of EUR 500,000 constitutes two monthly
instalments that were allegedly agreed with the Claimant in case of a successful transfer to
Benfica. Accordingly, for tax purposes, this amount is considered equivalent to the Player’s
salary and other income.
25. According to the Respondent, the gross amounts stipulated in Appendix Nº 1 of the
Contract correspond to the net amounts also provided for thereof after adding to them
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19,5% of tax as per Ukrainian legislation, 18% representing “income tax” and 1,5% “military
tax”).
26. Lastly, the Respondent argues that the Player failed to prove “any request from the
Portuguese tax authorities requiring him to pay additional taxes from the Compensation”.
27. The requests for relief of the Respondent, as amended, were the following:
“To reject all the Player’s claims above the contractually compensation of 500,000
Euros (five hundred thousand Euros)”.
c. Replica of the Claimant
28. In his replica, the Claimant insists on the fact that the Termination Agreement novated
(rather than amended) the Contract, since “the obligations under the Employment Contract
were replaced by those undertaken on the conclusion of the Termination Agreement”.
29. According to the Claimant, the intention of the Parties was that the Player received the
agreed amount net of any taxes, considering that he would be probably residing in Portugal
(or any other country) when the payment would become due. In this regard, the Claimant
asserts that “there is no person in the world, considering all the elements united referred above
would at some stage interpret the word Compensation as being “salary” and guess or suppose
that “after taxation” should apply restrictively, notably, only in relation to those taxes applied in
Ukraine”.
30. The Claimant further argues that the Respondent created the expectation in his mind that
he would effectively receive the full amount discharging him from any tax liability.
31. Lastly, the Respondent alleges that “by establishing the payment of the Compensation had to
be net, there is nothing that prevented the Player to claim the Club to pay the taxes applicable
on the top. Such request is not only correct and in accordance with what the Parties agreed but
also fairer including with the Club. Otherwise, over the amount payable as reimbursement of
the taxes paid by the Player because of the Compensation, the Club was also going to pay the
taxes over the referenced sum. In other words, to reach the referenced reimbursement amount
the Club also was going to pay the taxes applicable to it”.
d. Duplica of the Respondent
32. In its duplica, the Respondent confirmed that on 5 March 2024 (i.e., during the course of
the present proceedings) it paid EUR 500,000 to the Claimant’s Portuguese bank account,
as well as the taxes arising from this payment in Ukraine.
33. The Respondent insisted on the fact that the Termination Agreement provides that the
Respondent had to pay the agreed amount after taxation in Ukraine, not in Portugal, and
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REF. FPSD-12802
that the first time when the Claimant requested the gross compensation up to Portuguese
taxes was only on 2 June 2023 (i.e., with his first default notice).
34. In this regard, the Respondent considers that the Claimant is requesting it to pay him 52%
more than initially agreed, and that the Claimant has failed to prove an existing agreement
between the Parties by way of which the former undertook to pay taxes in Portugal on the
latter’s behalf. According to the Respondent, the claim of the Claimant is based only on his
own interpretation of the wording “after taxation” in the Termination Agreement.
e. Final comments of the Claimant
35. On 26 March 2024, the Claimant was requested to confirm whether he had received the
alleged payment made by the Respondent.
36. Also on 26 March 2024, the Claimant confirmed having received the amount of EUR 500,000
which, according to him, corresponded “to a partial payment of the amount claimed”.
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
37. First of all, the Dispute Resolution Chamber (hereinafter also referred to as the Chamber or
the DRC) analysed whether it was competent to deal with the case at hand. In this respect,
it took note that the present matter was presented to FIFA on 23 November 2023 and
submitted for decision on 22 April 2024. Taking into account the wording of art. 24 of the
March 2023 edition of the Procedural Rules Governing the Football Tribunal (hereinafter,
the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to
the matter at hand.
38. Subsequently, the Chamber referred to art. 2 par. 1 and art. 24 par. 1 lit. a) of the Procedural
Rules and observed that in accordance with art. 23 par. 1 in combination with art. 22 par. 1
lit. b) of the Regulations on the Status and Transfer of Players (May 2023), it is competent
to deal with the matter at stake, which concerns an employment-related dispute with an
international dimension between a Brazilian player and a Ukrainian club.
39. Subsequently, the Chamber analysed which regulations should be applicable as to the
substance of the matter. In this respect, it confirmed that, in accordance with art. 26 par. 1
and 2 of the Regulations on the Status and Transfer of Players (May 2023 edition), and
considering that the present claim was lodged on 23 November 2023, the May 2023 edition
of said regulations (hereinafter, the Regulations) is applicable to the matter at hand as to
the substance.
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b. Burden of proof
40. The Chamber recalled the basic principle of burden of proof, as stipulated in art. 13
par. 5 of the Procedural Rules, according to which a party claiming a right on the basis of
an alleged fact shall carry the respective burden of proof. Likewise, the Chamber stressed
the wording of art. 13 par. 4 of the Procedural Rules, pursuant to which it may consider
evidence not filed by the parties, including without limitation the evidence generated by or
within the Transfer Matching System (TMS).
c. Merits of the dispute
41. Its competence and the applicable regulations having been established, the Chamber
entered into the merits of the dispute. In this respect, the Chamber started by
acknowledging all the above-mentioned facts as well as the arguments and the
documentation on file. However, the Chamber emphasised that in the following
considerations it will refer only to the facts, arguments and documentary evidence, which
it considered pertinent for the assessment of the matter at hand.
i. Main legal discussion and considerations
42. The foregoing having been established, the Chamber moved to the substance of the
matter, and took note of the fact that this is a claim of a player against a club concerning
outstanding amounts as per the Termination Agreement concluded between the Parties,
amounting to EUR 500,000, as well as an additional amount of EUR 505,365.38 or,
alternatively, EUR 405,256.38 corresponding to alleged taxes over said amount.
43. In this context, the Chamber acknowledged that its task was to determine, based on the
evidence presented by the Parties, whether the claimed amounts had in fact remained
unpaid by the Respondent and, if so, whether the latter had a valid justification for not
having complied with its financial obligations.
44. The Chamber first noted that in the case at hand, the Respondent bore the burden of
proving that it indeed complied with the financial terms of the Termination Agreement
concluded between the Parties.
45. In this respect, the Chamber further took note of the fact that, on 5 March 2024 (i.e., during
the course of the present proceedings), the Respondent provided evidence regarding the
payment of EUR 500,000 to the Claimant, as well as payment of the relevant taxes to the
Ukrainian tax authorities.
46. The Chamber also took note of the fact that, on 26 March 2024, the Claimant confirmed
having received the above-mentioned sum of EUR 500,000.
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47. Based on the foregoing, the Chamber concluded that the Respondent had effectively paid
to the Claimant the payment provided for in the Termination Agreement and,
consequently, the Chamber decided to reject the Claimant’s request with regard to this
amount.
48. Notwithstanding the foregoing, the Chamber also took note of the Claimant’s additional
request concerning the alleged taxes over the above-mentioned amount (i.e., EUR
505,365.38 or, alternatively, EUR 405,256.38).
49. In this regard, the Chamber remarked that since the agreed payment of EUR 500,000 was
not paid until 5 March 2024, no tax liabilities have been incurred by the Claimant and,
hence, any ruling on the alleged taxes is premature at this point.
50. Without entering into the merits concerning taxes, the Chamber added that the Claimant
needs to incur the cost and suffer the harm before it can effectively seek relief before FIFA.
Consequently, the Chamber concluded that the request for taxes is premature.
d. Costs
51. The Chamber referred to art. 25 par. 1 of the Procedural Rules, according to which
“Procedures are free of charge where at least one of the parties is a player, coach, football agent,
or match agent”. Accordingly, the Chamber decided that no procedural costs were to be
imposed on the Parties.
52. Furthermore, the Chamber recalled the contents of art. 25 par. 8 of the Procedural Rules,
and decided that no procedural compensation shall be awarded in these proceedings.
53. Lastly, the Chamber concluded its deliberations by rejecting any other requests for relief
may by any of the Parties.
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IV. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, David Neres Campos, is rejected.
2.
The claim regarding taxes is premature.
3.
This decision is rendered without costs.
For the Football Tribunal:
Emilio García Silvero
Chief Legal & Compliance Officer
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NOTE RELATED TO THE APPEAL PROCEDURE:
According to article 57 par. 1 of the FIFA Statutes, this decision may be appealed against
before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of
this decision.
NOTE RELATED TO THE PUBLICATION:
FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request
of a party within five days of the notification of the motivated decision, to publish an
anonymised or a redacted version (cf. article 17 of the Procedural Rules).
CONTACT INFORMATION
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FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
www.fifa.com | legal.fifa.com | [email protected] | T: +41 (0)43 222 7777
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