Spain’s World Cup prize may face US tax under tournament income rules

WEB DESK: Spain’s FIFA World Cup 2026 triumph could carry financial implications beyond the pitch, as tournament-related earnings may be subject to United States tax laws because of activities conducted on American soil during the competition.

Spain secured the World Cup title along with a $50 million prize after winning the tournament, which was jointly hosted by the United States, Canada and Mexico. With several key matches staged in the United States, a portion of the income linked to the tournament could fall under US federal tax regulations.

According to Internal Revenue Service (IRS) guidelines, foreign individuals and organisations involved in World Cup-related activities may be required to pay tax on income earned from work or services performed within the United States.

The rules may apply to football players, coaches, team officials, media personnel, performers and businesses providing services during the tournament. Even temporary participation in the United States could create tax obligations for qualifying income.

However, the IRS will not automatically deduct tax from Spain’s entire $50 million FIFA prize. The final tax liability will depend on several factors, including the amount of income classified as US-sourced, FIFA’s payment structure, applicable international tax treaties and the method used by Spain’s football authorities to distribute the prize money.

Tax authorities from the three host nations have also established a framework to determine how tournament-related income will be allocated, taking into account factors such as the number of matches played in each country and where related activities occurred.

As the United States hosted the majority of matches during the 2026 FIFA World Cup, a significant portion of tournament-related earnings could fall within US tax jurisdiction.

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Spain’s existing tax treaty with the United States may also reduce the final tax burden by providing exemptions or relief, depending on the nature of the income and the recipients.

The final amount, if any, payable to US tax authorities will be determined after considering the classification of income, FIFA’s payment arrangements and the application of international tax agreements.