Real Sociedad follow Real Madrid and Barcelona by imposing pay cuts on playing staff

Real Sociedad have become the latest La Liga club to announce that they have introduced pay cuts to playing staff to offset the financial damage caused by the coronavirus-enforced shutdown.

With Spanish football in lockdown since mid-March and a return not likely until at least June, clubs are feeling the impact of the loss of broadcast and matchday revenues.

It has left non-playing and lower-paid employees at clubs particularly vulnerable, and Sociedad have taken the measure to impose pay reductions on the squad to protect those members of staff.

"An agreement has been reached with the first team for the reduction of their wages by 20% in case the league does not resume this season, and by 5% in case the season can start again," Sociedad said in a statement.

"This decision, taken with all of the parties concerned, helps us avoid traumatic measures for the rest of our employees and helps to balance the club's economic objectives in the face of a drop in income suffered after the suspension of competition."

Sociedad also announced a 20 per cent refund on season tickets for its supporters.

At the time of the La Liga suspension last month, Sociedad were in fourth place in the championship. They had also qualified for the Copa del Rey final against Athletic Bilbao in Seville on a date still to be decided.

Sociedad's announcement comes after similar pay cuts were introduced at other Spanish clubs. Real Madrid confirmed wage cuts, estimated by Spanish media to be 10 per cent if the season resumes and 20 per cent if the league is abandoned, while Barcelona and Atletico Madrid have cut salaries by 70 per cent. Espanyol have also introduced wage reductions.

Barcelona's handling of the process drew public criticism from Lionel Messi and Luis Suarez who accused the club of putting the players under unnecessary pressure.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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