ICC ‘threatens to move T20 World Cup from India’ in ongoing tax row

India's Virat Kohli reacts during the third Twenty20 cricket match between New Zealand and India at Seddon Park (Photo by MICHAEL BRADLEY/AFP via Getty Images)

The Board of Control for Cricket in India (BCCI) risks losing hosting rights to the men’s Twenty20 World Cup in 2021 unless it secures a tax exemption from the government for the tournament.

The International Cricket Council (ICC), which sanctions the tournament, has informed the BCCI that it reserves the right to strip India of hosting rights, ESPNcricinfo reports.

Emails cited the website reveal that the ICC had sought “unconditional confirmation” from the BCCI that it had resolved the tax issue by May 18. The BCCI had requested an extension of the deadline until June 30 amid uncertainty caused by the Covid-19 pandemic, but this has been rejected by the ICC.

In a message to the BCCI dated April 29, ICC general counsel Jonathan Hall wrote that IBC (ICC Business Corporation) is “entitled to terminate the agreement with immediate effect at any time” from May 18.

This came after the BCCI invoked the ‘force majeure’ clause, citing Covid-19 as an extenuating circumstance that prevents the body from fulfilling the terms of the host agreement. However, it is understood that the BCCI has since withdrawn the force majeure claim.

Hall’s email added: “The BCCI has clearly had many years to arrange the tax solution…which is why the agreement asks for it to be provided…no later than 18 (eighteen) months prior…and why the BCCI was required to provide it by 31 December 2019. In such circumstances IBC is not prepared to agree to the requested extension to June 30, 2020 or 30 days after the lockdown is lifted, whichever is later.”

The tax issue dates back to October 2018, when the ICC board first publicly stated that the issue needed resolving.

A similar problem arose when India hosted the 2016 T20 World Cup, with the BCCI having failed to secure a tax exemption which resulted in losses of $20m (€18.2m) to $30m for the ICC.

The ICC told SportBusiness today (Wednesday): “The ICC and BCCI have been working in partnership to address the issue of tax exemptions for ICC events that is a requirement of the host agreement signed by all parties at the beginning of the cycle in 2015 and this work is ongoing.

“There are certain timelines within the agreements that we collectively work towards to ensure we can deliver successful world class events and continue to invest in the sport of cricket. In addition to this the ICC Board agreed clear timelines for the resolution of the tax issues which we are guided by.”

The 2021 T20 World Cup is due to take place in India in October and November next year. The 2020 event is due to take place in Australia this October and November, with the event currently scheduled to go ahead as planned despite Covid-19.

The Spanish government recently extended a series of tax breaks and visa permissions granted to Uefa for the hosting of football’s Euro 2020 matches in the city of Bilbao now that the tournament has been postponed until next year due to the coronavirus pandemic.

The tax breaks, requested by Uefa as a part of the host candidacy process, exempt Uefa employees, officials and appointees, accredited members of the media and participating teams, whether foreign or Spanish, from corporate tax and non-resident income tax (IRNR) in the country.