FIFA President Gianni Infantino claps after President Donald Trump received the FIFA Peace Prize during the draw for the 2026 soccer World Cup at the Kennedy Center in Washington, Friday, Dec. 5, 2025. (Dan Mullan/Pool Photo via AP)
With the 2026 tournament approaching, FIFA has moved close to resolving one of the most significant financial issues facing participating nations, reaching an understanding with the United States Treasury that would allow all 48 teams to apply for exemption from federal taxes on their World Cup earnings. The development follows months of concern that the expanded tournament, hosted across the United States, Canada and Mexico, would impose uneven financial burdens on national associations, particularly those without existing tax treaties with the United States. While the latest breakthrough addresses federal taxation, discussions remain ongoing and many teams are still expected to face state and city taxes depending on where their matches are played.
Timeline of negotiations and how the issue emerged
The issue became clear earlier in April 2026, when reporting indicated that FIFA had been unable to secure a blanket tax exemption for participating nations, despite holding tax-free status itself in the United States since the 1994 World Cup. Under US law, income earned within the country is subject to taxation, which meant that national associations would have been liable for federal, state and local taxes on prize money and commercial earnings generated during the tournament. At that stage, only 18 of the 48 qualified nations were protected through double taxation agreements (DTAs) with the United States. Those agreements, largely held by European countries alongside Canada, Mexico, Australia, Egypt, Morocco and South Africa, reduce or eliminate certain tax liabilities. The remaining 30 nations, many of them from smaller or emerging football economies, had no such protection and were expected to face significantly higher costs. Countries such as Curaçao and Cape Verde, both making their World Cup debuts, were cited as examples of how the system could create disparities, with smaller associations potentially facing higher effective tax burdens than wealthier European federations purely due to their tax status.
Federal tax exemption breakthrough and how it works
A day before the FIFA Council meeting in Vancouver on April 30, The Guardian reported that discussions involving the US Treasury and Donald Trump’s World Cup taskforce were expected to lead to FIFA securing an undertaking that national associations would be able to apply for federal tax exemption under section 501(c)(3) of the US Internal Revenue Code. According to the report, FIFA has been reassured that applications are likely to succeed if organisations meet the required conditions, including operating as non-profit bodies, not distributing profits to private shareholders and avoiding political activity. National football associations are expected to meet these criteria.
FIFA President Gianni Infantino speaks during the 76th FIFA Congress in Vancouver, British Columbia, Thursday, April 30, 2026. (Ethan Cairns/The Canadian Press via AP)
If implemented as expected, the exemption would remove the most significant portion of the tax burden, with federal income tax rates in the United States reaching approximately 37% for individuals and around 21% for corporate entities.
State and city taxes still create uneven financial outcomes
Even with federal exemptions in place, the financial picture remains uneven because state and local taxes will still apply in many cases. Tax rates vary widely depending on location. Florida, which will host matches in Miami, has no state income tax, while New Jersey, where the final will be held at MetLife Stadium, can reach 10.75%, and California, with matches in Los Angeles and San Francisco, has rates as high as 13.3%. Because the United States will host 78 of the tournament’s 104 matches, including all fixtures from the quarter-finals onwards, most teams will inevitably play games within US jurisdictions where these taxes apply. Canada and Mexico, which will each host 13 matches, have already granted full tax exemptions to participating associations, creating a contrast within the same tournament.
FIFA World Cup 2026 (via Getty Images)
The result is that a team’s final tax liability will depend not only on how far it progresses but also on where its matches are scheduled, introducing what officials had previously described as a “postcode lottery”.FIFA has declined to comment publicly on the negotiations, while sources cited by The Guardian say the situation remains ongoing. The shift nevertheless represents a substantial change from earlier expectations that teams could lose a large portion of their tournament earnings to federal taxation, while questions around potential city and state taxes are also understood to be part of the broader negotiations and yet to be fully resolved.
Why the issue mattered for smaller and non-European nations
The financial implications of the original situation were particularly significant for nations without DTAs, many of which rely heavily on World Cup revenue to fund domestic football development. Earlier, FIFA has increased the total prize and participation fund by 15%, bringing it to $871 million (£645 million), with each of the 48 teams guaranteed at least $12.5 million. However, without tax relief, a substantial portion of that income would have been retained within the United States through taxation.
The FIFA World Cup Trophy is displayed during the 76th FIFA Congress in Vancouver, British Columbia, Thursday, April 30, 2026. (Ethan Cairns/The Canadian Press via AP)
Concerns raised earlier in the year suggested that some federations could face losing more than 20% of their earnings, a figure that would have had a disproportionate impact on smaller associations compared to wealthier European counterparts.
How this differs from previous World Cups
In previous editions of the tournament, host governments have typically granted full tax exemptions to all participating teams, ensuring a level financial playing field. The 2022 World Cup in Qatar is the most recent example, where all 32 national associations were exempt from local taxation on their earnings. That approach ensured that participation revenue flowed back into national football systems without deductions. The 2026 tournament’s three-country hosting model, combined with the United States’ tax framework and treaty system, created a more complex environment that FIFA has been attempting to address through negotiation rather than automatic exemption. With the tournament scheduled to begin on June 11, when Mexico hosts South Africa in the opening match, the resolution of these outstanding details remains a priority for FIFA and participating associations as preparations enter their final phase. Go to Source
