Real Madrid defends ‘innocent Cristiano Ronaldo €14.8m in tax fraud allegations

Real Madrid has issued a statement saying that it believes that Cristiano Ronaldo is “innocent” after a Spanish state prosecutor accused him of defrauding the country’s tax office of €14.8m (US$16.5m).

The club issued a statement today saying: “Real Madrid expresses its complete confidence in our player Cristiano Ronaldo, who we understand has acted within the law as far as complying with his fiscal obligations.”

It added that it is “convinced” that Ronaldo “will demonstrate his complete innocence”.

A Spanish state prosecutor accused Ronaldo of four counts of tax fraud from 2011-14 on Tuesday. The prosecutor said Ronaldo had used a shell company in the British Virgin Islands to hide the true amount of income made from image rights, among other means of illegally reducing the amount of taxes he paid.

Ronaldo’s agent has denied any wrongdoing and previously declared that the player is “up to date with his taxes’.

Spanish prosecutors

According to Spanish prosecutors, Ronaldo sought to hide at least a part of that wealth from the country’s tax authorities. They allege that he failed to declare earnings, including from the exploitation of his image rights, between 2011 and 2014, notifying earnings of €11.5m instead of €43m over that period.

“The accused made use of a corporate structure created in 2010 to hide from the tax authority income generated in Spain through image rights,” the Spanish prosecutors said in a statement. Ronaldo had failed to comply with his tax obligations in a manner that was both “voluntary” and “conscious”, they added.

Last year, as reported here, a series of offshore tax related leaks emerged at the end of last week, the first centring on an alleged system of tax avoidance set up by Real Madrid star Cristiano Ronaldo and Mourinho’s agent Jorge Mendes, via his company Gestifute, via a Sunday Times special report.

2016 report

According to the report, the agency allegedly hid £154m, (€185m) from tax authorities through a network of offshore accounts and companies in Ireland, the British Virgin Islands, Panama and Switzerland.

Real Madrid star Ronaldo and Manchester United manager Mourinho allegedly moved large sums to the British Virgin Islands.

The structure allegedly used by the footballer involved setting up a company to manage his image rights in the British Virgin Islands, which then transferred the rights to a second company in Ireland.

According to the statement from the Madrid prosecutors, the decision to set up the company in the Virgin Islands was done with the sole aim of creating a “screen” to confuse the Spanish authorities.

Lionel Messi

Ronaldo’s case bears strong similarities to that of Ronaldo’s on-pitch rival from Barcelona FC, Lionel Messi, who was found guilty of tax fraud by a Spanish court last year and handed a 21-month suspended jail sentence.

The Barcelona striker and his father were found guilty of using companies in Belize and Uruguay to avoid paying taxes of €4.16m on income earned through the sale of image rights between 2007 and 2009.

Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. Deputy Editor, International Investment. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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