Updated 10.12am with Birkirkara statement
Birkirkara FC’s European footballing dreams are in doubt after tax documents submitted as part of their bid to be licensed by governing body UEFA were flagged as irregular.
An investigation has been launched into the club’s tax affairs and an official at the Inland Revenue Department has been suspended, pending a probe into the paperwork, Times of Malta is informed.
Sources at the tax department said the incident revolves around the issuing of a certificate of compliance, which confirms that an organisation does not owe income tax or is honouring an agreement to settle debts.
Normal procedure for issuing this document, which was handed to the club earlier this month, was not followed.
The sources said that Birkirkara FC had entered into a payment plan with the tax authorities to settle pending tax dues. But an adequate downpayment was not made and the repayment period was extended well beyond the normal parameters, a department source said.
It is understood that the agreement has been cancelled and the compliance certificate rescinded by the taxman over concerns of foul play.
Birkirkara FC had already submitted the documents as part of the club’s application to be licensed by European football’s governing body.
The UEFA licence would entitle the club to participate in the new Europa Conference League and comes with cash allowances in excess of €250,000. However, doubts have now been raised over the club’s application.
Birkirkara FC, like other eligible local clubs, submitted a request to participate in the lucrative European competitions to the Malta FA.
No comment from club president
Contacted by Times of Malta, the Malta FA said it was taking the matter seriously.
Birkirkara FC president Frank Zarb did not comment when contacted, saying only the club’s affairs were in order. When pressed on the matter, Zarb ended the conversation.
The club put out a statement on social media on Saturday morning, after Times of Malta revealed the tax probe, in which it distanced itself from any alleged wrongdoing and threatened legal action against anyone "spreading false and malicious information for his / their own individual benefit."
"The club has a buona fide legal agreement with the competent tax authorities that has been duly signed by all parties and has the necessary documentation to substantiate this fact. This documentation was not only presented in time but accepted by the MFA with its license application," the club said.
"The club is aware of who might be behind these intended attacks and shall be reporting such to the competent authorities," it added.
This season was the first time the MFA had requested clubs to submit a certificate from the tax authorities that proves their fiscal affairs are in order.
Sources at the Malta FA said the requirement was introduced after it became aware that many local clubs have long outstanding tax arrears.
“The objective of these compliance certificates was to ensure that the clubs get in order and stop operating outside the rules,” one Malta FA official said.