All World Cup teams poised for tax exemption after Fifa talks with US treasury

Fifa is poised to secure a last-minute tax exemption for all 48 World Cup qualifiers after intensive negotiations with the US treasury.

After months of lobbying Fifa has secured a significant breakthrough that should result in the national associations being exempt from federal taxes, although many will still have to pay state and city tax on their World Cup earnings.

After talks with the treasury that have also involved Donald Trump’s World Cup taskforce, Fifa is understood to have received an undertaking that national associations can apply to be tax exempt under section 501(c)(3) of the treasury’s internal revenue code.

Although a successful application is not guaranteed, Fifa has been reassured that it is likely to be granted if applicants follow the proper procedures.

The main requirements for a tax exemption under section 501(c)(3) are that the organisation in question must not benefit any individual private shareholders or take part in any political activity, obligations that a national governing body should meet comfortably.

Fifa has been classed as a tax-exempt organisation in the US since the 1994 World Cup, but until now has been unable to secure a similar exemption for its members.

Canada and Mexico, the World Cup’s other co-hosts this summer, have granted tax exemptions to national associations who play in their countries.

US treasury approval would save the national associations millions and ease some of their fears about the cost of taking part in the World Cup, with a combination of tax rates and travel and hotel expenses their main concerns.

The Guardian revealed last month that many countries feared losing money on the tournament even if they reached the latter stages, which led to them lobbying Fifa to increase their prize and participation fund.

At a meeting of Fifa Council in Vancouver it was agreed to increase payments by 15%, with the pot now totalling $871m (£645m), and all 48 countries guaranteed to receive $12.5m.

Fifa declined to comment on the tax negotiations, with a source describing the situation as ongoing.