The Spanish prosecutor has filed a lawsuit accusing Cristiano Ronaldo of defrauding the Spanish government of €14.7 Million worth of tax revenue. According to the accusations, Ronaldo created a business structure in order to help him avoid paying taxes on his image rights.
The Spanish prosecutor accused Ronaldo of having his agent Jorge Mendes set up an off-shore business structure. This business structure, according to the suit, allowed Ronaldo to avoid paying taxes from the Beckham law. The “Beckham law” introduced taxes onto non-Spanish nationals who had previously been exempted from paying taxes under Spanish law.
According to the accusations, Ronaldo established companies in Ireland and Virgin Islands to handle his image rights. This tax structure allowed him to escape paying significant tax revenue to the Spanish government.
Ronaldo’s representing agency, Gestifute, have vehemently denied the allegations. Ronaldo tried to voluntarily remediate the tax controversy by paying €5.6m in 2014. However, the tax authorities have found him to still be non-compliant.
Real Madrid have issued the following official announcement in response to the accusations:
"Real Madrid C.F have full confidence in our player Cristiano Ronaldo, who we understand has acted in accordance with the legality regarding the fulfilment of his fiscal obligations.Since his arrival at Real Madrid C.F in July 2009, Cristiano Ronaldo has always shown a clear will to fulfil all his tax obligations.Real Madrid C.F. are absolutely convinced that our player, Cristiano Ronaldo, will prove his total innocence in this process.Real Madrid C.F. hope that justice is done as quickly as possible so that his innocence can be proven as soon as possible."
The player himself stated that his conscience is clear after being pressed on the accusations.
Ronaldo’s tax problems are the latest in a series of tax fraud accusations rocking Spanish football. Ronaldo’s eternal rival Lionel Messi was just sentenced to a 21 month prison sentence for tax fraud.
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However, Neither Messi nor Ronaldo are likely to spend any time behind bars. Under under Spanish law, first-time offenders whose sentences are under two years can serve probation rather than go to prison.
If the accusations are true, it isn’t a great look for Ronaldo, just as it wasn’t a great look for Messi. Spanish footballers need to start paying their fair share in taxes.
These off the pitch distractions tarnish the reputation of the Spanish League. Spain’s performances in Europe earned La Liga the reputation as one of the most competitive leagues in the world. But corruption threatens to damage the brand.
Football fans everywhere should welcome efforts to clean up financial malfeasance.