France's Hollande shows soccer clubs red card on tax

Reuters

* President says clubs won't be exempt from super tax

* Clubs threaten match blackout by refusing to play

* Tax will affect 14 of the 20 Ligue 1 soccer clubs (Adds clubs' reaction)

PARIS, Oct 31 (Reuters) - French President Francois Hollande has finally found an interest group he can say 'no' to.

The Socialist leader told soccer club owners on Thursday he has no intention of repealing or exempting them from a 75 percent tax on players' salaries above one million euros ($1.36 million) per year, despite clubs threatening to refuse to play later this month.

"The need to clean up public finances fully justifies this effort demanded of businesses that choose to pay such high annual salaries," Hollande said in a statement after meeting club executives.

The Union of Professional Football Clubs (UCPF) said in a statement: "Club representatives have not been heard despite several constructive proposals (such as the non-retroactivity of the tax).

"This tax, which was initially meant for the richest, will in our case impact companies in debt.

"In these conditions, while we are still open to dialogue, clubs remain mobilised until the end of November, when they have decided to organise a 'blackout' (by not playing matches)."

Hollande's determination to stick to the two-year super tax contrasted with his government's backpedalling on other fiscal fronts, like a proposed tax on trucks that was suspended this week following protests by farmers and truckers in Brittany.

TAX RISES

The proposed "eco-tax", meant to raise up to one billion euros a year for rail projects, will be suspended until the government has fine-tuned its application, Budget Minister Bernard Cazeneuve told the BFM TV channel.

Pressure on France from European partners to reduce its public deficit have led to tax rises in the 2014 budget and fuelled rising discontent, with an opinion poll showing Hollande with the lowest approval rating of any French president on record.

The Socialist government has also backed down on a proposed tax on savings, reinstated a tax break on education costs and dropped a planned new tax on business turnover, each after protests by interest groups.

But the 75 percent tax on top earners, a flagship pledge in Hollande's 2012 election campaign, is much more popular than other levies.

A survey by Pollster OpinionWay this month showed 85 percent of people asked did not think football clubs should be exempt.

Fourteen of the 20 Ligue 1 clubs will be affected by the tax, with Qatar-funded Paris St Germain the hardest hit, while Monaco, who are backed by a Russian billionaire, will be exempt as they do not fall under French tax laws.

PSG, who have spent more than 200 million euros on transfers since being taken over by Qatar Sports Investments in 2011, are expected to pay about 20 million euros - just under half of the total the clubs would pay annually.

($1 = 0.7356 euros) (Writing by Nick Vinocur and Alexandria Sage; Additional reporting by Julien Pretot; Editing by Paul Taylor and Ken Ferris)

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