FIFA 2027 Reform: The New Legal & Tax Landscape for International Football Transfers

From 1 January 2027, the international football transfer market will undergo one of its most significant regulatory changes since FIFA’s current transfer system was established.

The new edition of the FIFA Regulations on the Status and Transfer of Players (RSTP), approved in June 2026, introduces major changes affecting contractual breaches, the liability of a player’s new club, the calculation of compensation, contracts involving minors and the right of certain players to participate financially in their own transfer fees.

The reform stems, to a significant extent, from the judgment of the Court of Justice of the European Union (CJEU) of 4 October 2024 in the Diarra case, which called into question certain FIFA rules on the grounds of their potential incompatibility with the free movement of workers and EU competition law.

However, the significance of the reform extends far beyond sports law.

The new RSTP once again demonstrates that an international football transfer cannot be analysed merely as a transaction between two clubs. It may simultaneously involve employment, contractual, tax, international and EU law considerations.

Contracts will become even more important

One of the main changes concerns Article 17 of the RSTP, which governs the consequences of contractual breaches.

The new framework allows clubs and players to determine in advance, through their contract, the financial consequences of a potential breach, subject to certain proportionality requirements.

This does not mean that FIFA is making release clauses mandatory. Rather, it means that contract drafting will become even more important, as the parties may anticipate the financial consequences of certain future scenarios.

Where no compensation has been agreed in advance, the amount due will have to be calculated by reference to the damage actually suffered.

For a club, relevant factors may include, among others, the value of the player’s services, the loss of a potential transfer fee or transfer value, and replacement costs.

This has an important practical consequence: in future disputes, it may no longer be enough simply to claim that a player had a particular “market value”. The economic loss will need to be substantiated through evidence such as contracts, offers, comparable transactions, previous negotiations or, where appropriate, expert reports.

The 45-day rule could change the legal risk of a transfer

The reform also changes the potential liability of the player’s new club.

Signing a player who has breached a previous contract will no longer automatically give rise to joint and several liability. For such liability to arise, it will be necessary to establish that the new club induced the player to breach the previous contract.

There is, however, an important rule.

If the player signs with the new club within 45 days following the contractual breach, a presumption of inducement will apply. The new club will be able to rebut that presumption by producing sufficient evidence.

From a risk-management perspective, this significantly increases the importance of properly documenting negotiations.

When the first contact took place, who initiated discussions, what the new club knew about the previous contract and what role the agent played may all become legally relevant.

The RSTP does not formally impose a general obligation to carry out due diligence before every transfer. However, the new framework makes a prior contractual and documentary review increasingly advisable, particularly where the player is involved in a dispute with the former club.

How FIFA’s new 5% rule interacts with Spanish law

Another of the most notable changes is the new Article 21bis.

In certain permanent international transfers, players whose annual fixed remuneration at their former club is below EUR 150,000 will, as a general rule and subject to the conditions established in the RSTP, be entitled to receive 5% of the fixed transfer compensation actually received by the selling club.

This represents an important development: FIFA expressly recognises that certain players may participate financially in the value generated by their own transfer.

In Spain, however, this immediately raises an additional legal question.

Royal Decree 1006/1985, which governs the special employment relationship of professional athletes in Spain, already provides that where an employment relationship is terminated by mutual agreement for the purpose of a permanent transfer to another club, the parties may agree on the financial terms of that termination. In the absence of an agreement, the compensation payable to the athlete may not be less than 15% of the gross amount agreed.

In addition, certain collective bargaining agreements applicable to professional football in Spain contain their own provisions governing players’ financial participation in transfers.

Does this mean that a player will be entitled to receive the Spanish 15% and then add FIFA’s new 5% on top?

Not necessarily.

Nor can it be stated, as a general rule, that the Spanish mechanism will automatically replace the FIFA rule.

Article 21bis itself provides for exceptions where national law or collective bargaining arrangements establish equivalent mechanisms.

The application of the new system in Spain will therefore need to be assessed by reference to the specific transaction, the player’s contract, Royal Decree 1006/1985 and the applicable collective bargaining agreement.

This is likely to become one of the areas requiring the greatest degree of legal interpretation once the new RSTP starts to be applied in practice.

The economic right exists, but its tax treatment must also be analysed

A player’s participation in the transfer fee raises another issue that is often overlooked in purely sporting analyses: how that payment should be taxed.

FIFA may determine the existence of the right and the way in which it is calculated within its regulatory system, but its tax treatment will depend on the legislation applicable in each jurisdiction.

An international football transfer may therefore raise questions concerning:

• the player’s tax residence;
• the jurisdiction in which the income is regarded as arising;
• withholding tax obligations;
• double taxation treaties;
• potential tax obligations in more than one jurisdiction;
• and, where applicable, Social Security contributions.

These issues become particularly relevant when the transfer also involves a change of tax residence.

Within the same tax year, a footballer may receive salary, signing bonuses, amounts linked to a transfer, image rights income or other remuneration originating in different countries.

For this reason, the tax consequences of a transfer should not be analysed only after the transaction has been completed. They should form part of the structure of the transaction itself.

The new RSTP should not be interpreted as a regulatory system capable of automatically displacing domestic employment legislation.

In Spain, professional footballers remain subject, among other applicable rules, to Royal Decree 1006/1985.

The FIFA reform strengthens protection against certain abusive practices by clubs, such as unjustified exclusion from training or the use of player registration as a means of pressure.

Spanish law, however, already expressly recognises a professional athlete’s right to effective occupation (derecho a la ocupación efectiva), once again demonstrating that the same factual situation may have both sporting and employment-law consequences.

A proper legal analysis therefore requires both levels of regulation to be considered together.

This is perhaps the most important conclusion arising from the reform.

An international transfer does not consist solely of an agreement between two clubs and a separate employment contract between the player and the new club.

It may simultaneously affect:

• the employment relationship;
• contractual compensation;
• FIFA regulations;
• taxation;
• international tax residence;
• Social Security;
• collective bargaining arrangements;
• and European Union law.

An error in any one of these areas may significantly alter the economic outcome of the transaction.

From 2027 onwards, it will therefore become even more important to analyse a transfer as a single integrated transaction, rather than as a collection of independent documents.

The Diarra case and FIFA’s regulatory reform reflect an increasingly common legal reality: cross-border economic transactions that are simultaneously subject to international private regulation, domestic legislation and supranational law.

Football makes this phenomenon particularly visible, but it is by no means unique to sport.

Executives relocating between countries, internationally mobile professionals, business owners, investors and internationally structured family wealth can face similar challenges when a single decision produces employment, tax and legal consequences across several jurisdictions.

It is precisely in this context that a multidisciplinary approach becomes particularly valuable.

At ILIA ETL GLOBAL, legal, tax and employment advice is approached in an integrated manner, with particular experience in transactions and situations involving an international component, supported by the international ETL GLOBAL network.

The FIFA 2027 reform provides a clear example of why this type of coordination is becoming increasingly important.

Because behind an international football transfer there may be much more than a sporting transaction.

It may constitute a cross-border legal, employment and tax transaction whose implications need to be assessed as a whole before any decision is taken.

Article prepared by Mario García, Commercial and Business Development Director at ILIA ETL GLOBAL, a law graduate with more than 33 years of experience in legal practice and management.