The Internal Revenue Service may be entitled to a large chunk of Spain's $50 million World Cup prize after the 2026 tournament — because the United States is one of the three host nations. According to U.S. tax law, up to $43.75 million of the winnings could be classified as U.S.-sourced income and subject to taxation.
How the co-host rule triggers the tax
The 2026 World Cup will be played across the United States, Canada, and Mexico. That tri-national setup creates a novel tax question: when a team like Spain wins the tournament, a portion of its earnings is technically earned in the U.S. under IRS rules. The agency considers income as U.S.-sourced if it's derived from activities performed in the country. Since the final and several key matches are scheduled on American soil, a significant share of the prize money could be treated as domestic income.
The exact cut is unclear, but the IRS could target as much as $43.75 million of the $50 million pot. That's 87.5 percent — a figure that reflects the number of games played in the U.S. compared to the other host nations. The Spanish team, of course, may not like that math.
Spain's potential liability
If Spain wins the 2026 World Cup, it would receive the $50 million prize from FIFA, the sport's governing body. But the IRS could then demand a tax payment on the U.S.-sourced portion. The tax rate would depend on Spain's overall income and whether a tax treaty between the U.S. and Spain applies. The U.S. and Spain do have a bilateral tax treaty, but it may not cover prize money from a sporting event. That could leave the Spanish football federation exposed to a hefty bill.
FIFA has not publicly commented on the tax implications. The Spanish federation is unlikely to have budgeted for a U.S. tax bill, given that the 2026 tournament will be the first World Cup co-hosted by the United States since 1994.
What happens next
The IRS has not issued a formal ruling on the matter, and it's possible the agency will wait until after the tournament to assess the tax. But the potential liability is real enough that legal experts expect the Spanish federation to seek guidance from tax advisors before the 2026 tournament. The question is whether Spain will try to negotiate a lower rate or simply pay up. Either way, the U.S. Treasury could end up with a multimillion-dollar check from a foreign football team.
