Spain’s recent $50 million prize for winning the FIFA Women’s World Cup could be subject to a significant federal tax, according to IRS rules. The potential withholding stems from regulations concerning nonresident foreign athletes competing in America.
The issue centers on a possible 30% federal withholding tax that the IRS may apply to Spain's winnings. This is due to existing rules for nonresident foreign athletes who earn income within the United States. While the specifics of how this applies to a team winning an international tournament are being scrutinized, the potential impact could significantly reduce the amount of money Spain receives.
Critics have labeled the potential tax a “ripoff.” The exact application of these IRS rules to the World Cup prize money is currently under debate, but the regulations themselves are not new. They exist as part of the standard tax code for foreign nationals earning income in the U.S., and officials are now applying them to this unique situation.
The $50 million prize represents a substantial reward for Spain’s victory, and a 30% withholding would equate to $15 million being taken by the IRS. This has sparked outrage among those who believe it is unfair to tax winnings earned in an international competition.
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