Advisers under scrutiny over tax
CRISTIANO Ronaldo under suspicion, Radamel Falcao investigated, Lionel Messi sentenced – Spain’s courts have been busy tack ling the a lleged and rea l multimillion-euro ta x evasion of footba ll’s greatest sta rs.
But while they may be aware of what t hey are doing, footba llers rely on expert go-bet weens like big banks to help them manage their finances, and the European Commission is look ing into measures that would dissuade these intermediaries from assist ing wealthy indiv idua ls in avoiding ta x.
On top of their mammoth salaries and victory bonuses, the world’s leading footballers earn millions by loaning their name and image for ad campaigns – be it sports equipment, underwear or yogurt.
FC Barcelona’s Argentine forward Messi was handed a 2.1 million euro ($2.3 million) fine last year for avoiding paying taxes on part of the income he earned from image rights via companies in Belize, Britain, Switzerland and Uruguay.
When it confirmed the sentence last month, Spain’s Supreme Court rejected Messi’s argument that he ignored how his wealth was managed but still expressed surprise at the fact that his tax advisers were not prosecuted.
Monaco’s Colombian for ward Falcao, meanwhile, is suspected of hav ing hidden 5.6 million euros in image rights f rom Spain’s ta x man when he played for Atletico Madrid in 2012 and 2013.
His Portuguese agent Jorge Mendes has been put under formal investigation in the case, and will be questioned by a judge on June 27.
EU to fight back
Mendes, one of the most influential personalities in the football world, is also the agent of Ronaldo, who risks legal proceedings in Spain after prosecutors alleged this week that he evaded more than 14 million euros in tax through offshore companies.
If t he Real Madrid star “is finally put under formal investigation, t he judge will a lso have to ask how guilt y t he adv isers and agents are”, said Carlos Cruzado, head of the Gestha union of civ il ser vants who work for ta x aut horities.
In a bid to avoid specia lised gobetweens from exploiting lega l loopholes to pay as litt le ta x as possible, EU Economics Commissioner Pierre Moscovici will on Wednesday unveil a new directive against “fiscal optimisation”.
“So far little has been done to introduce disincentives for those intermediaries that help clients avoid paying their fair share of tax,” a spokesman for the commission said.
The directive aims to force those who advise people with lots of money or companies to declare the transborder products they propose to their clients to the taxman.
“Ta x aut horities will t hen be able to better – and much earlier – identif y t he reg ulator y weaknesses t hat allow some companies and indiv idua ls to substantia lly reduce t heir ta xes,” he said.
The commission just sportspeople.
But these often resort to tax experts to manage their wealth – be they individuals, private practices or international banks.
“We’re not talking about an adviser who helps you fill in your income tax return, but offices that are specialised in setting up opaque structures, and many are international banks,” says Jose Mari Pelaez, a tax inspector who specialises in tax havens.
These offices can offer “made to measure” services, he adds.
Last year, it was revealed that many of the 175,000 offshore companies registered in the Bahamas, a tax haven, between 1959 and 2016 were created by banks, according to information leaked to the International Consortium of Investigative Journalists.
Without t hese intermediaries, it would be ver y difficult to access a ta x haven.
“But with a phone ca ll and 500 to 800 euros, such an office can set up one or t wo shell companies with a bank account i n Switzerland or i n another ta x haven,” Pelaez said. “It ta kes t wo or three days and hardly costs a t hing.” is not targeting