Soccer-German FA hit with hefty back tax payment over 2006 World Cup

BERLIN, Oct 20 (Reuters) - The German Football Association must pay 19.2 million euros($22.61 million) in back taxes related to a controversial payment for the 2006 World Cup but it will challenge the Frankfurt tax office’s decision, it said on Friday.

The tax office said the payment of 6.7 million euros from the DFB to world soccer’s governing body FIFA in 2005 had not been declared properly and the association now owed 19.2 million.

That payment has triggered several investigations in the past two years over allegations it had been used as a slush fund to buy votes in favour of Germany’s bid to host the 2006 tournament.

“The tax authority is questioning the tax deductibility of the payment and the non-profit character of the DFB for the year 2006,” the DFB said in a statement.

“The DFB, following advice from tax and legal advisors, will challenge these altered tax assessments,” it said.

Officially, at the time the payment was made, it had been for an opening ceremony. But such a ceremony never took place and a DFB-commissioned investigation last year said the sum was the return of a loan via FIFA from former Adidas chief Robert Louis-Dreyfus.

It has never been clarified what the initial loan had been for and why it had to be paid back to the late Dreyfus via FIFA.

The 2006 World Cup organising committee chief Franz Beckenbauer has vehemently denied all allegations the funds were used to buy votes in favour of the German bid.

While cleared in the DFB report, the former World Cup winning captain is, however, facing criminal proceedings in Switzerland over payments related to that tournament.

The Swiss Attorney General’s Office (OAG) opened criminal proceedings against Beckenbauer and three other former high-ranking German soccer officials in 2016 related to allegations of fraud, criminal mismanagement, money laundering and misappropriation of funds.

$1 = 0.8492 euros Reporting by Karolos Grohmann; Editing by Rex Gowar