Finance Ministry Urges Football Clubs to Settle €35.6 Million in Debt

The Ministry of Finance has sent a stern warning to football clubs participating in the Debt Repayment Plan, instructing them to pay off debts owed to the state, amounting to €35.6 million, incurred between July 2007 and March 2023.

Additionally, the Ministry presented a document to the Finance Committee of the Parliament detailing the outstanding debts of each football club and their respective monthly installment obligations.

Recently, the Tax Department issued a letter to the Cyprus Football Association (CFA), urging first division teams, among others, to adhere to the provisions of the government plan introduced in May 2023. This plan emphasizes the importance of repaying previous debts while also filing tax returns in compliance with the latest regulations. The updated scheme extends the arrangement to include tax debts accrued between April 1, 2021, and March 31, 2023, though no additional relief in the form of interest and charge reductions is provided. Furthermore, the repayment period has been reduced from 180 to 168 installments.

A key stipulation of the plan is that no new debts are to be incurred by the clubs, with non-compliance resulting in exclusion from the scheme. Despite this, unions and clubs have failed to meet the condition, leading the Ministry to issue certificates allowing these teams to continue participating in both the Cypriot championship and European competitions.

Notably, debts of €33.1 million, which were accumulated up until 2021, are not subject to interest or charges, as they were frozen under a previous government decision. At the time, €10 million in debt was also written off. However, new debts created after April 2021 are now subject to interest and additional charges under the current plan.

It is worth recalling that the Government of Nikos Christodoulidis had introduced a bill to increase the betting tax to help facilitate the repayment of these debts by football clubs, but the bill was shelved due to opposition from political parties.

In a new communication to the parliamentary Finance Committee, State Aid Audit Supervisor Stella Michailidou expressed concerns that the recently submitted bill could constitute incompatible state aid. She reiterated the recommendation to notify the European Commission, particularly in cases where the plan is not adhered to, stressing that any tax settlements must ensure proportionate recovery of taxes owed.

Debt Overview of Football Clubs

According to the latest data from the Ministry of Finance, the total debts of football clubs to both the Tax Department and Social Insurance, as of March 2023, stand at €35.6 million. Of this, €2.4 million represents new debts created after the implementation of the latest repayment plan.

The following is a breakdown of the debts owed by each football club between July 2007 and March 2023, as well as their monthly installment requirements:

• APOEL Nicosia: Total debts amounted to €13.7 million in March 2023, including €671,000 in new debts from April 2021 to March 2023. APOEL is required to pay €82,000 per month.

• OMONIA Nicosia: Total debts stood at €5.3 million as of March 2023. No additional debts were created after the new plan. OMONIA must pay €32,000 monthly.

• AEL Limassol: Total debts were €4.5 million, including €322,117 in new debts from April 2021 to March 2023. AEL’s monthly payment is set at €26,920.

• APOLLONAS Limassol: Owed €4.1 million as of March 2023, with €3.3 million in old debts and €783,000 in new debts. APOLLONAS must pay €24,740 per month.

• ANORTHOSIS Famagusta: Total debts reached €4 million, with €88,545 in new debts. ANORTHOSIS is required to pay €24,198 monthly.

• Ethnikos Achnas: Total debts were €1.15 million, of which €37,430 were new debts. The monthly installment for Ethnikos Achnas is €6,887.

• Ermis Aradippou: The club owed €543,401 in March 2023, with €671,000 in debts from 2021-2023. The monthly installment is €3,234.

• ARIS Limassol: Total debts were €477,371, with €18,000 in new debts. ARIS is required to pay €2,841 each month.

• DOXA Katokopia: Total debts amounted to €440,568. The club’s monthly payment is €2,622.

• Enosis Neon Paralimni: Accumulated debts reached €405,324, with no new debts created since the latest plan. The club must pay €2,412 monthly.

• NEA SALAMINA: Total debts stood at €409,019. No additional debts were incurred after the new plan. NEW SALAMINA is required to pay €2,434 monthly.

• OTHELLOS Athienou: Total debts in March 2023 were €96,249, with a monthly installment of €573.

• Akritas Chlorakas: Total debts amounted to €87,888, with €34,114 in old debts and €53,774 from April 2021 to March 2023. The monthly payment is €523.15.

• Paphos FC: Owed €74,382 in total, with €303,365 in new debts from 2021-2023. The monthly installment is set at €442.75.

• PAEEK Kyrenia: Total debts were €27,342, with €3,908 from 2021-2023. The club must pay €162.75 monthly.

• Olympiakos Nicosia: Total debts were €586.36, with a monthly installment of €3.49.

Meanwhile, AEK Larnaca, Karmiotissa Ploumidion, and AEZ Zakakiou had no outstanding tax debts as of March 2023, according to the Ministry of Finance.

By fLEXI tEAM