With the 2026 FIFA World Cup just 43 days away from its scheduled kick-off on June 11, FIFA is reportedly close to finalizing a significant agreement with the US Treasury that would offer federal tax exemptions to all 48 participating nations. This last-minute development, reported by The Guardian on Wednesday, April 29, comes after lengthy negotiations and addresses a major concern for many national associations. Previously, only 18 of the 48 nations had Double Taxation Agreements (DTAs) with the United States government, which would have protected them from federal, state, and city tax liabilities. This left a majority of countries, particularly smaller nations like Curaçao and Cape Verde, facing the prospect of substantial tax burdens that could have eroded their tournament earnings, even if they progressed to the latter stages.

Federal tax relief secured after negotiations

The potential agreement means that national associations can now apply to be tax exempt under section 501(c)(3) of the treasury’s Internal Revenue Code. While a successful application is not automatically guaranteed, FIFA has received reassurances that it is highly likely to be granted, provided applicants follow the proper procedures. The Guardian reported, “Fifa is understood to have received an undertaking that national associations can apply to be tax exempt under section 501(c)(3) of the treasury’s Internal revenue Code.” The main requirements for this exemption are that the organization must not benefit any individual private shareholders or engage in political activity – obligations that national governing bodies are expected to meet comfortably. This move aligns the US with co-hosts Canada and Mexico, both of whom have already granted blanket tax exemptions to all national associations competing in the tournament.

Addressing previous financial concerns

The prospect of significant tax liabilities, combined with travel and hotel expenses, had led many countries to lobby FIFA for increased financial support. In response, FIFA has already boosted the total prize money by 15 percent to £645 million ($871 million). Under the new structure, all 48 countries are guaranteed to receive at least $12.5 million, a sum that would have been heavily impacted by federal taxes without this new agreement. While federal tax relief appears to be in sight, associations may still be required to pay state and city taxes. FIFA, which has held tax-free status in the US since 1994 as a not-for-profit organization, declined to comment on the ongoing tax negotiations. The discussions with the US Treasury reportedly also involved Donald Trump’s World Cup taskforce. The 2026 World Cup is set to kick off on June 11, with Mexico hosting South Africa in the opening match. Sources: www.sportbible.com, www.theguardian.com

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