Saturday, 30 May, 2020

Tax authority accepts Ronaldo’s €18.8m evasion charges: Sources

Published on: 5:43 pm - Friday | July 27, 2018

Cristiano Ronaldo’s tax issue with the Spanish authorities is finally coming to a close with prosecutors approving the deal for the Juventus forward to pay €18.8 million, sources close to the player confirmed

He will accept responsibility for four different breaches of Spanish tax laws and an automatically suspended two-year prison sentence, ESPNFC reports.

Sources close to Ronaldo’s camp confirmed to ESPN FC last month the terms of the deal agreed with prosecutors at the tax agency, and on Thursday the sources said that Hacienda chiefs signed off on the deal, which comes at the end of over two years of negotiations between the various parties involved.

The Hacienda prosecutors argued that Ronaldo and his advisers used a network of companies in various countries including Ireland and the British Virgin Islands to evade paying €14.7m in taxes due on “image rights” income earned between 2011 and 2014.

During a 90-minute court hearing in the Spanish capital last July, Ronaldo strongly rejected any wrongdoing and told judge Monica Gomez Ferrer that he felt victimised by the Spanish authorities. The former Manchester United player also maintained that such treatment played a part in his desire to leave Madrid.

The final agreement between Ronaldo’s camp and the prosecutors at the tax authority includes an acceptance that €5.7m is owed in taxes on his image rights income, along with a further €13.1m in fines as interest.

Ronaldo earns an estimated $93m (€80m) a year, according to Forbes, with approximately half coming from image rights deals with his many sponsors.

Observers, including KPMG’s Football Benchmark group, argue that having joined Italian side Juventus this summer, Ronaldo will enjoy a more beneficial fiscal situation, paying a flat total of €100,000 tax on all image rights income earned outside of his new country of residence.

Spanish courts have recently cracked down on tax evasion among leading footballers, following the lifting of the so-called “Beckham Law” that allowed them to curb their taxes. Barcelona’s Lionel Messi was handed a 21-month prison sentence in 2017 on similar charges but under Spanish law was able to exchange the penalty for a fine.

Other clients of Ronaldo’s Gestifute agency have also been pursued by the Spanish tax authorities — with Bayern Munich playmaker James Rodriguez currently involved in negotiations with Hacienda over his image rights income during 2014.

Manchester United manager Jose Mourinho denied he oweAd any further taxes when he appeared in court in Madrid in October 2017, while players Radamel Falcao, Fabio Coentrao, Pepe, Ricardo Carvalho, and Angel Di Maria have all also had similar image rights issues.