KEY POINTS
- More than half of the qualifying 48 nations face unexpected tax liabilities on their tournament earnings.
- Smaller football associations from developing countries will bear the heaviest financial burden due to a lack of US tax treaties.
- FIFA reduced the daily living allowance for delegations despite rising travel and accommodation costs across North America.
A significant financial crisis is brewing for many countries participating in the upcoming 2026 World Cup. FIFA failed to reach a comprehensive tax exemption agreement with the United States government for all competing nations. This breakdown in negotiations means that over half of the 48 qualified teams must pay various taxes.
The tax burden specifically targets national associations and their official delegations during their stay in the US. While FIFA itself enjoys tax-free status as a non-profit, this benefit does not extend to individual teams. National federations now face federal, state, and city taxes on any income they generate during the event.
Disparities in international tax law mean that European nations will generally avoid these extra costs. Eighteen qualifiers currently have Double Taxation Agreements in place with the United States. These treaties protect teams like England, France, and Spain from paying federal taxes on their tournament earnings.
In contrast, smaller and developing football nations face much harsher financial realities. Countries such as Curaçao, Cape Verde, and Haiti do not have existing tax treaties with the US. Consequently, these associations will see a large percentage of their prize money diverted to American tax authorities.
The US federal corporate tax rate currently stands at 21 percent for these organizations. High-earning individuals within the delegations, including star players and head coaches, face an even higher income tax rate of 37 percent. These players must pay tax in every US city where they perform.
State-level taxes further complicate the financial planning for teams moving between different host cities. Florida offers a favorable environment with zero state tax for games held in Miami. However, teams playing in New Jersey or California face additional tax hits of up to 13.3 percent.
FIFA has not adjusted its operational budget to account for these varying tax liabilities. Every qualified team receives a fixed sum of 1.5 million dollars to cover their basic tournament expenses. Smaller associations argue this flat rate is unfair given the massive differences in their net costs.
To make matters worse, FIFA recently lowered the daily living allowance for all delegation members. The rate dropped from 850 dollars in 2022 to 600 dollars for the 2026 cycle. This reduction comes at a time when hotel and transport prices in US host cities are reaching record highs.
Both Canada and Mexico have granted full tax exemptions to all visiting teams and their staff. This creates a noticeable financial advantage for squads playing their group stage matches outside of the United States. Teams stationed in the US will essentially subsidize local government budgets through their participation.
Football officials from affected nations expressed deep concern that these funds are being lost to the sport. They argue that millions of dollars will stay in the US instead of developing local football infrastructure. The financial gap between elite European teams and the rest of the world continues to widen.
