Soccer foundation rakes in USD 32 million thanks to tax loophole

August 26, 2015

orbfo

A private foundation initiated by Hungarian Prime Minister Viktor Orbán (pictured) has been the main beneficiary of a modification to the tax code adopted at the end of 2010 which came into force in July 2011, according to Menedzsment Fórum, a management news website.

Hungarian companies can write off 100 percent of so-called TAO donations made to sports organizations engaged in spectator sports possessing a “sports development” program approved by the National Sport Institute. Beneficiaries are free to use such donations to fund a wide range of activities, from training future players to infrastructure development.

The Felcsúti Utánpótlás Neveléséért Alapítvány (Felcsút Foundation for Raising Replacements) founded in Orbán’s home town of Felcsút has received more than HUF 9 billion (USD 32 million) in donations since 2010, receiving HUF 2.25 billion in 2014 alone–a HUF 700 million increase over the previous year–despite reportedly losing one-third of its corporate sponsors after the Prime Minister’s falling out with Fidesz oligarch Lajos Simicska.

Screen Shot 2015-08-26 at 5.31.32 PM

Donation proceeds were used to build  the “Pancho” soccer stadium next door to the Prime Minister’s home, named after legendary Hungarian football player Ferenc “Pancho” Puskás.

Critics object to tax revenues being diverted from state coffers to private foundations in this manner, especially after the Hungarian parliament modified the law in December 2014 to relieve donors and beneficiaries of the onus of having to disclose publicly how much money was donated or received in this way.

Reference:

http://mfor.hu/cikkek/vallalatok/TAO_penzek__megint_milliardokat_zsebelt_be_a_Felcsut.html