January 2023 - FIFA Clearing House – Declaration of transfer compensation payments and training rewards
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Sophia ABDELJALIL
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[Sent to all TMS users on 30 January 2023]
Dear TMS user,
With the launch of FIFA’s Clearing House project and the entry into force of the FIFA Clearing House Regulations on 16 November 2022, changes have been introduced in TMS to facilitate the calculation and distribution of training reward payments (training compensation and solidarity mechanism, as defined in the Regulations on the Status and Transfer of Players, “RSTP”) through the FIFA Clearing House, most notably with the generation of electronic player passports (EPPs) and their review process.
With this communication, the Clearing House Department would like to clarify a number of important practical matters concerning payments of transfer compensation and training rewards, and their corresponding payment declaration.
With the introduction of the FIFA Clearing House process, the proof of payment declared to FIFA plays a crucial role in the calculation of training rewards.
We ask you to please review this communication in detail and consider it for future transfers of players at your club or affiliated clubs.
Declaration of payments of transfer compensation in transfer instructions and proof of payments
You are reminded that, in accordance with article 1 of Annexe 5 to the RSTP, 5% of any transfer compensation must be deducted for payment of the solidarity contribution. Colloquially, this method of calculating and paying solidarity contributions is known as “95+5”.
As a general rule and to ensure proper functioning of the FIFA Clearing House process, member associations and clubs must declare these payments of transfer compensation as follows:
Member associations and their clubs must declare the full amount of payments agreed between the clubs for the transfer of the playerin the corresponding transfer instruction (international transfers in TMS, domestic transfers in DTMS or the system used by the member association).
Clubs must then make these payments, withholding 5% of the total amount in all cases unless agreed otherwise (see below), and declare this amount with 5% withheld for the solidarity contribution in the proof of payment declaration.
Once the final amount of solidarity contribution payment has been processed and paid through the Clearing House, if applicable and in accordance with the final EPP and all applicable conditions, in cases where there is a remaining balance of the transfer compensation to be paid, the new club should make the payment of the remaining amount of the transfer compensation directly to the former club, following existent jurisprudence.
This will ensure the proper calculation of training rewards and consideration of all registrations of the player for the distribution of the solidarity contribution.
Special agreements between clubs – solidarity contribution included in transfer compensation, former club waives its entitlement to solidarity contribution
In cases where the former and new clubs agree in the transfer of a player that the solidarity contributionto the former clubis included in the transfer compensation, the new club must make and declare the payments as described above, withholding always the full 5%, and upload the transfer or loan agreement during the EPP review process in the “waiver” section in relation to the registration of the player at the former club.
Payments of solidarity contributions to other training clubs, where applicable, must be processed through the FIFA Clearing House.
Special agreements between clubs – payment of solidarity contribution excluded from transfer compensation / transfer compensation net of solidarity contribution (“100+5")
Clubs sometimes insert a clause in the transfer agreement by which the solidarity contribution is excluded from any amount payable. Colloquially, this method of calculating and paying solidarity contributions is known as transfer compensation net of solidarity contribution or “100+5”.
This practice is not in line with the principle set out in article 1 of Annexe 5 to the RSTP. If nevertheless parties decide to make this agreement, please note that the following applies regarding the declaration and calculation of payments:
The new club must declare in the proof of payment the total amount paid to the former club (exceptionally without withholding 5%).
FIFA will calculate the amount of solidarity contribution due according to the amount declared in the proof of payment, considering in all cases the amount declared as 95% of the total payment.
In such cases, it is not expected that the new club will pay any remaining amount to the former club as part of the transfer fees outside of the FIFA Clearing House.
Agreements for payment of training rewards between clubs transferring a player
Clubs sometimes insert a clause in the transfer agreement of a player placing the player’s former club under an obligation to distribute the solidarity contribution. However, according to consistent jurisprudence, under such circumstances and in strict application of the RSTP, it is the new club that will be required to pay the solidarity contribution to the training clubs concerned.
You are reminded that, in accordance with article 13 of the FIFA Clearing House Regulations, it is the new club of the player that will be subject to the compliance assessment by the FIFA Clearing House and will be requested by the FIFA Clearing House to make payments of training rewards in accordance with the relevant EPP and allocation statement.
In particular, in accordance with article 13 paragraph 3 of the FIFA Clearing House Regulations, the new club may not assign responsibility to pay the amount requested by the FIFA Clearing House to any other party.
Any bilateral agreements between the clubs will be dealt with outside of the EPP and FIFA Clearing House process, and in line with the consolidated jurisprudence of the FIFA Football Tribunal.
Consideration of training compensation in transfers of players with transfer compensation
According to the jurisprudence of the Dispute Resolution Chamber of the Football Tribunal, unless otherwise specified in the relevant transfer agreement, transfer compensation due to the former club is deemed included in the transfer compensation agreed for the transfer of the player (cf. Commentary on the Regulations on the Status and Transfer of Players, edition 2021, page 290).
Notwithstanding the above, in all cases of international transfers with transfer compensation and where there is a possible entitlement to training compensation, TMS will generate an EPP for the calculation of training compensation and solidarity contributions.
During the review phase of the EPP, the new club may upload a copy of the relevant agreement as evidence that no training compensation to the former club is due. Within the EPP review process in TMS, these transfer agreements must be declared in the “waiver” section.
We hope that this information clarifies and facilitates your work in transferring players and in the declaration of such transfers.
Sophia ABDELJALIL
[Sent to all TMS users on 30 January 2023]
Dear TMS user,
With the launch of FIFA’s Clearing House project and the entry into force of the FIFA Clearing House Regulations on 16 November 2022, changes have been introduced in TMS to facilitate the calculation and distribution of training reward payments (training compensation and solidarity mechanism, as defined in the Regulations on the Status and Transfer of Players, “RSTP”) through the FIFA Clearing House, most notably with the generation of electronic player passports (EPPs) and their review process.
With this communication, the Clearing House Department would like to clarify a number of important practical matters concerning payments of transfer compensation and training rewards, and their corresponding payment declaration.
With the introduction of the FIFA Clearing House process, the proof of payment declared to FIFA plays a crucial role in the calculation of training rewards.
We ask you to please review this communication in detail and consider it for future transfers of players at your club or affiliated clubs.
Declaration of payments of transfer compensation in transfer instructions and proof of payments
You are reminded that, in accordance with article 1 of Annexe 5 to the RSTP, 5% of any transfer compensation must be deducted for payment of the solidarity contribution. Colloquially, this method of calculating and paying solidarity contributions is known as “95+5”.
As a general rule and to ensure proper functioning of the FIFA Clearing House process, member associations and clubs must declare these payments of transfer compensation as follows:
Member associations and their clubs must declare the full amount of payments agreed between the clubs for the transfer of the player in the corresponding transfer instruction (international transfers in TMS, domestic transfers in DTMS or the system used by the member association).
Clubs must then make these payments, withholding 5% of the total amount in all cases unless agreed otherwise (see below), and declare this amount with 5% withheld for the solidarity contribution in the proof of payment declaration.
Once the final amount of solidarity contribution payment has been processed and paid through the Clearing House, if applicable and in accordance with the final EPP and all applicable conditions, in cases where there is a remaining balance of the transfer compensation to be paid, the new club should make the payment of the remaining amount of the transfer compensation directly to the former club, following existent jurisprudence.
This will ensure the proper calculation of training rewards and consideration of all registrations of the player for the distribution of the solidarity contribution.
Special agreements between clubs – solidarity contribution included in transfer compensation, former club waives its entitlement to solidarity contribution
In cases where the former and new clubs agree in the transfer of a player that the solidarity contribution to the former club is included in the transfer compensation, the new club must make and declare the payments as described above, withholding always the full 5%, and upload the transfer or loan agreement during the EPP review process in the “waiver” section in relation to the registration of the player at the former club.
Payments of solidarity contributions to other training clubs, where applicable, must be processed through the FIFA Clearing House.
Special agreements between clubs – payment of solidarity contribution excluded from transfer compensation / transfer compensation net of solidarity contribution (“100+5")
Clubs sometimes insert a clause in the transfer agreement by which the solidarity contribution is excluded from any amount payable. Colloquially, this method of calculating and paying solidarity contributions is known as transfer compensation net of solidarity contribution or “100+5”.
This practice is not in line with the principle set out in article 1 of Annexe 5 to the RSTP. If nevertheless parties decide to make this agreement, please note that the following applies regarding the declaration and calculation of payments:
The new club must declare in the proof of payment the total amount paid to the former club (exceptionally without withholding 5%).
FIFA will calculate the amount of solidarity contribution due according to the amount declared in the proof of payment, considering in all cases the amount declared as 95% of the total payment.
In such cases, it is not expected that the new club will pay any remaining amount to the former club as part of the transfer fees outside of the FIFA Clearing House.
Agreements for payment of training rewards between clubs transferring a player
Clubs sometimes insert a clause in the transfer agreement of a player placing the player’s former club under an obligation to distribute the solidarity contribution. However, according to consistent jurisprudence, under such circumstances and in strict application of the RSTP, it is the new club that will be required to pay the solidarity contribution to the training clubs concerned.
You are reminded that, in accordance with article 13 of the FIFA Clearing House Regulations, it is the new club of the player that will be subject to the compliance assessment by the FIFA Clearing House and will be requested by the FIFA Clearing House to make payments of training rewards in accordance with the relevant EPP and allocation statement.
In particular, in accordance with article 13 paragraph 3 of the FIFA Clearing House Regulations, the new club may not assign responsibility to pay the amount requested by the FIFA Clearing House to any other party.
Any bilateral agreements between the clubs will be dealt with outside of the EPP and FIFA Clearing House process, and in line with the consolidated jurisprudence of the FIFA Football Tribunal.
Consideration of training compensation in transfers of players with transfer compensation
According to the jurisprudence of the Dispute Resolution Chamber of the Football Tribunal, unless otherwise specified in the relevant transfer agreement, transfer compensation due to the former club is deemed included in the transfer compensation agreed for the transfer of the player (cf. Commentary on the Regulations on the Status and Transfer of Players, edition 2021, page 290).
Notwithstanding the above, in all cases of international transfers with transfer compensation and where there is a possible entitlement to training compensation, TMS will generate an EPP for the calculation of training compensation and solidarity contributions.
During the review phase of the EPP, the new club may upload a copy of the relevant agreement as evidence that no training compensation to the former club is due. Within the EPP review process in TMS, these transfer agreements must be declared in the “waiver” section.
We hope that this information clarifies and facilitates your work in transferring players and in the declaration of such transfers.
Kind regards,
FIFA Clearing House Department