Mexican tax police open probe into Liga MX club ‘double contracts’

August 21 – Mexico’s tax authorities (SAT) are to open an investigation into Mexican clubs over the practice of ‘double contracts’. The investigation has been triggered by the public complaint of former Veracruz manager Guillermo Vázquez (pictured) who claims the club owes him money after he quit last week.

Vázquez terminated his contract four matches into the Liga MX season, claiming his contract situation was financially unsustainable. His contract with Liga MX was for 50,000 pesos (€2,300) per month, well below expectations for a Liga MX manager. However, it appears he was looking to get a second contract (‘double contract’) with the club.

‘Double contracts’ are when a player or manager signs one contract to register with the federation as an official document and then has a separate side contract, usually with the club  but sometimes with a third party.

Vázquez told ESPN that he had a verbal contract with the club that there would be a second contract that would make up the agreed balance of his wages, however, neither the contract or the extra payment appeared.

It is the legality of the second contract – that is commonplace in Mexican football – that is coming under scrutiny, and the potential that may be within that contract for tax avoidance or other financial crime.

Mexican federation Femexfut (FMX) has stated that it is against the practice of ‘double contracts’, saying it “condemns any scheme of private contracting that has not been registered before the administrative bodies of Liga MX.”

A tax authority spokesperson said: “It is important to clarify that simulating acts that are intended to hide the SAT by the players the total income received is a crime, as well as not knowing the withholding of income tax made to football players by the players Clubs.”

Vázquez told ESPN: “[They said] that a contract with the federation had to be signed in which a minimal amount appears and the [separate] contract with the club where the rest of the wage comes from wasn’t signed, that’s what we were fighting about.”

FMX said in its statement: “Of the disputes filed with the FMF by its affiliates in the last year, 82% were resolved in favor of the technical body or player, by virtue of the existence of a contract duly registered and signed between the parties.

“The FMF reiterates its commitment to work in conjunction with Liga MX and thus guarantee compliance with the regulations of both institutions.”

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