Issue link: https://maltatoday.uberflip.com/i/827043
maltatoday, TUESDAY, 23 MAY 2017 News 9 CONTINUES FROM PAGE 1 Cavani happens to be subject to a tax audit aimed at all foreign play- ers of the PSG, as French daily newspaper Le Parisien revealed in December, specifically re- lated to the years 2012 to 2014. When he arrived in Paris in the summer of 2013, Ca- vani was under contract with Adidas. In November 2014, the player announced that he signed with the American firm Nike. Six months earlier, he had set up in Malta the com- pany Edicavaniofficial Limited, which belongs to a second Mal- tese structure, Rocha Holdings Limited. Rocha is 99% owned by Edin- son Cavani, with address at 24 rue du Commandant Guilbaud in Paris, the address of PSG sta- dium Parc des Princes. Rocha Holdings in Malta is adminis- tered by tax advisors Fortia. In 2014, Edicavaniofficial did not get any money, probably because the new contract with Nike had not yet taken effect. In 2015, it received €1.59 million. But it also incurred nothing short of €605,743 in adminis- trative expenses – which raises questions about the nature of these costs for companies that usually do not employ anyone except service providers – which reduced taxable profit to €988,000. Under the Maltese tax rules, Edicavaniofficial then paid €338,835 in tax at 35%, and paid its dividends to Rocha Holdings, which was entitled to a total refund of €290,430 – recorded in its accounts as a "current tax asset". So Cavani paid only €48,805 of corporate tax, instead of the €530,847 had the company been registered in France. EIC member Mediapart sub- mitted this scheme to two lawyers specialized in the management of image rights of high-level athletes, who con- sidered it problematic. That's because Article 155-A of the French General Tax Code au- thorizes a footballer resident in France to collect his sponsor- ship income through a foreign company, but only if the com- pany has a real activity. "In this case, the tax authori- ties may consider that it is a pure interposition of the for- eign company, which sole pur- pose is to avoid direct payment to the player, with significant consequences," the Mediapart expert said. If the foreign company is con- sidered as artificial by the tax authorities, the image rights money can be taxed again and penalised. Cavani declared to EIC that he had nothing to hide, since the company Edicavaniofficial "carries [his name]". "The income of these com- panies is declared and taxed in France, in application of the French tax law," Edinson Ca- vani told EIC. MaltaToday is part of the European Investigations Col- laborations that is reporting on The Malta Files, which has been made possible through a grant from journalismfund. eu Cavani paid only €48,805 of corporate tax, instead of €530,847