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German football federation facing huge tax bill in World Cup affair

GERMAN FOOTBALL FEDERATION FACING HUGE TAX BILL IN WORLD CUP AFFAIR

The German football federation DFB is facing a 26-million-euro (30-million-dollar) tax bill amid investigations into a payment around the 2006 World Cup.

In its financial report for the 2016 business year, the DFB said it had been notified by tax authorities of an amended tax assessment for 2006 after the federation's non-profit status for that year was withdrawn.

"Given this, the DFB would have to pay tax payments and interest charges of around 26.2 million euros," the financial report says.

The DFB board and its legal advisers believe the decision to deny non-profit status will still be overturned on appeal.

DFB treasurer Stephan Osnabruegge said in Frankfurt Monday that "we are convinced that the factual situation does not justify new tax assessments."

For this reason the federation has no provision for tax risks in its 2016 financial year statement.

However "the aftermath of the so-called World Cup affair" will have a significant impact on the budget, Osnabruegge said.

The DFB has already spent 7.11 million euros on investigating the World Cup payment affair including legal costs for an investigation and report by the law firm Freshfields Bruckhaus Deringer.

The affair, which has centred on a sum of 6.7 million euros paid by the DFB to world governing body FIFA, is the subject of investigations by German and Swiss prosecuting authorities.

The payment was declared by the federation in its tax returns as a contribution to a FIFA cultural gala which never took place, and as an operating expenditure for tax purposes.

Swiss prosecutors opened criminal proceedings on November 6, 2015 against Franz Beckenbauer, the head of the German 2006 World Cup organizing committee, and former senior German football federation officials Wolfgang Niersbach, Theo Zwanziger and Horst R Schmidt.

German prosecuting authorities in November 2015 separately opened an investigation on "suspicion of tax evasion in a particularly severe case" into senior DFB officials in connection with the payment.

In December, former football great Beckenbauer broke a long silence on the affair to reject allegations of bribes having been paid in connection with the World Cup.

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