Chinese Football Association on Thursday imposed measures to clamp down on big-spending Chinese Super League teams and get them to toe a tougher financial line. A salary cap of 10 million yuan, or USD 1.45 million, has been set as the association vowed to kick out the so-called “yin-yang contracts”
Considered a widespread practice in Chinese sports and the country’s film industry, yin-yang contracts refers to the practice of preparing two contracts, one for being shown to the tax man and the other showing the real value of the agreement.
It thus facilitates tax-evasion and the CFA said that teams must submit contracts for their players and coaches by the end of the year. If evidence of tax-evasion surfaces, the offending player or coach face a ban of between one and three years. Their clubs can be deducted points or even kicked out the league.
CSL teams have been accused of distorting the transfer market by buying European and South American players at inflated costs and contracts. Brazilian midfielder Oscar and Argentine striker Carlos Tevez became some of the best-payed players in the world when they moved to Chinese clubs.
While the foreign players won’t be affected by the salary cap, clubs’ annual expenditure can not exceed 1.2 billion yuan in 2019 and that figure will be reduced to 900 million in 2021.
The CFA had last year slapped a 100 percent transfer tax on the purchase of overseas players, which significantly reined in Chinese clubs, and the organisation limited the number of foreigners each team can field to three a match.