Bizarre US tax law could drain more than 30 countries of World Cup revenue as FIFA fails to secure exemption International Sports News

The 2026 FIFA World Cup is just a few weeks away, but behind the scale of the 48-team event in three countries lurks a quiet question that has nothing to do with football. For the first time in decades, countries taking part in the World Cup in large numbers know that some of their revenue could be lost to taxes.The heart of the matter is that while FIFA itself retains the tax-exempt status it has had in the United States since the 1994 World Cup, it has failed to obtain the same full tax exemption for the 48 participating national associations. This gap, coupled with the imbalance in the structure of U.S. tax law and the international tax treaty network, means that the financial impact will not be evenly distributed. It is clear that more than half of the sectors, especially non-European countries, may face higher costs.

Why this World Cup is different from previous ones

In previous tournaments, host governments have typically provided tax exemptions to all participating teams. The 2022 World Cup in Qatar is the latest example, with all 32 national associations being allowed to operate without paying local taxes on their tournament income. That didn’t happen in the United States this time. According to “The” report guardianFIFA was unable to negotiate a blanket exemption with the U.S. government. As a result, the national association will now pay a mix of federal, state and municipal taxes on the revenue generated during the tournament.

Under U.S. law, athletes and performers must pay taxes on their earnings while working in the country. This principle applies directly to football players participating in the World Cup. Backroom staff and coaches fall into slightly different categories under tax treaties, but they are still part of the wider financial equation.

Treaty divide, why some countries are protected while others are not

The biggest dividing line is the double taxation agreement (DTA). These are bilateral treaties between countries that prevent individuals or organizations from being taxed twice on the same income. Of the 48 teams participating in the 2026 World Cup, only 18 are from countries that have signed double taxation agreements with the United States. The agreements cover mostly European countries, along with co-hosts Canada and Mexico, as well as a handful of others such as Australia, Egypt, Morocco and South Africa. For these countries, the burden is significantly lessened because their delegations are exempt from certain federal taxes. For the remaining 30 countries, many of them from smaller football economies, there is no such protection. This imbalance is at the heart of the problem. As Oriana Morrison, a tax consultant who has advised the Portuguese and Brazilian football federations, said in comments reported by the Guardian: Teams from countries with tax treaties “will have significantly lower costs than smaller countries such as Curaçao and Haiti”. Countries participating in the World Cup for the first time, such as Curacao and Cape Verde, could end up with larger tax liabilities because of their location than wealthy European nations such as England, France or Germany.

How taxes actually apply and who pays what

When broken down, the details get more complicated because players are always taxed in the U.S. on the income they earn in the U.S., regardless of any tax treaty. This means tournament fees, prize money and business income associated with the tournament fall within the scope of the US tax system. Coaches and staff may be treated differently depending on treaty coverage. For example, Thomas Tuchel, who runs England, would normally only pay taxes in the UK due to treaty protections. In contrast, current Brazil coach Carlo Ancelotti is expected to face taxes in both Brazil and the United States because Brazil does not have a double taxation agreement with the United States.

For high-income earners, this number is considerable. The federal income tax rate for the top bracket in the United States is about 37%, while the corporate tax rate is about 21%. On top of that, state-level taxes vary greatly depending on where the game is held. Florida, for example, has no state income tax, while New Jersey, which will host the final at MetLife Stadium, can hit 10.75%, and California, where Los Angeles and San Francisco host games, can hit 13.3%. The differences mean each team’s exact tax bill depends not only on how much they earn, but also where their games are scheduled.

Cost pressure isn’t just about taxes, it’s about the entire financial model

Even without tax issues, some federations have begun to worry about costs. FIFA has set a fixed operating budget of $1.5 million per team for the tournament. The budget includes a daily allowance for each delegation member, which has been reduced from $850 for the 2022 World Cup to $600. This reduction comes despite significantly higher travel, accommodation and logistics costs in the United States compared to Qatar. When combined with potential tax liabilities, profits can become tight, especially for smaller associations. As Morrison points out, the implications are not just accounting. For smaller football associations, participating in the World Cup can bring a windfall and support the development of domestic football. Losing some revenue due to taxes changes the economics of the tournament. “It will cost a lot of money for most non-European countries to participate in the World Cup,” she said, adding that money that would have supported local soccer “will stay in the United States.”

Geography adds another layer of complexity

The tournament is spread across three countries, but the United States will host the majority of the games, 78 of the 104 games, including all games after the quarterfinals. This is important because both Canada and Mexico offer full tax exemptions to participating teams. Any games held in these countries will carry a lighter financial burden. However, once teams reach the later knockout rounds, they will inevitably play in the United States, where the tax risk increases.

This uneven geography creates a situation where two teams in the same tournament could face vastly different financial outcomes depending on where the tournament is played and how far along it goes.

FIFA’s reaction and possible changes

FIFA has yet to publicly detail the full solution, but sources said the governing body is working with national federations to manage the tax implications and provide guidance. There are also changes on the income front. Reports in late April suggested that FIFA had agreed in principle to increase prize money and entry fees for the 2026 World Cup, with final approval expected at a FIFA Council meeting in Vancouver. The change is seen as a response to concerns first raised earlier this year that the team could end up losing money despite competing in the sport’s biggest tournament.

A broader perspective

On paper, expanding to 48 teams is an attempt to make the World Cup more inclusive. Financially, it introduces a layer of inequality that depends less on performance and more on tax treaties and geography. For wealthy European countries that have signed the agreement, the impact is manageable. For smaller countries without these protections, the difference can be large enough to turn what should be a rare fiscal stimulus into a more complex calculation.