High-profile tax fraud cases could hurt Spanish soccer
Now that the season is over, Lionel Messi is getting ready to go to court.
Messi will appear in front of a judge this week to defend himself from accusations he failed to properly pay taxes for part of his earnings from Barcelona, becoming the latest high-profile player to have to deal with Spain’s tough tax system.
Neymar, Javier Mascherano, Adriano and Xabi Alonso also had to deal with Spanish tax authorities recently.
The cases have brought unwanted attention to Spanish soccer, and could start scaring some players away just as the Spanish league tries to find ways to become more competitive against the Premier League, whose clubs have the financial power to go after nearly every top player on the market.
Neymar’s father last year said the constant harassment over his son’s taxes could lead to the player’s departure from Barcelona.
Players have been keeping quiet and don’t speak publicly about tax cases in Spain, but many admit it’s uncomfortable to watch Messi and others face the tribunals because of off-the-field issues. The Spanish league also avoids the subject, saying it can’t interfere in legal matters involving players and tax authorities.
Messi and his father, Jorge Horacio Messi, have been charged with three counts of tax fraud and could be sentenced to nearly two years in prison if found guilty of defrauding Spain’s tax office of €4.1 million from 2007-09.
The case is centered on the alleged unlawful activities of Messi’s father, but authorities said the Barcelona player knew enough to also be named in the case. They deny any wrongdoing.
Messi was also being investigated by Spanish tax authorities after his name was among those released in the probe of international offshore accounts, known as the Panama Papers, although he was not charged for those allegations.
Messi’s trial starts today, and the Argentine player is expected to testify at the Barcelona court on Thursday. He is not obliged to appear in court every day.
In nearly all cases involving soccer players, the alleged irregularities are related to the creation of fictitious corporate structures to avoid paying taxes on income from image rights. Some also include the use of tax havens.
“The tax agency has always looked into these structures created by football players, as it looks into the activities of people from other sectors as well,” Spain’s tax authority said in a statement. “We must control the use of companies that are aimed at reducing people’s fiscal burden.”
Many players have defended themselves by blaming financial advisers who claimed such structures were legal. That was the case with Mascherano, Messi’s teammate with Argentina and Barcelona, who earlier this year was handed a suspended oneyear prison sentence for not paying nearly €1.5 million in taxes for 2011 and 2012.
He said he hired a “prestigious Spanish tax firm” which recommended “certain structures” that it said were accepted by the law.
“I’m a professional athlete,” Mascherano said at the time. “I have no extensive knowledge of tax and legal issues. Therefore, I must lean on professionals who handle these technical issues that are complex for me.”
Not long after Macherano’s case, Brazil striker Neymar had to testify before a judge because of alleged irregularities involving his transfer to Barcelona. He and the club were accused of withholding the real amount of the transfer fee, in part to avoid paying the full amount of taxes.
“If we don’t have peace of mind in our working environment, we will have to leave Spain,” said Neymar’s father, who was also named in the case.
Earlier this year, former Real Madrid midfielder Alonso was accused of defrauding Spain’s tax office of €3 million from 2009-11. Last month, prosecutors accused Barcelona defender Adriano of failing to declare income from his image rights between 2011 and 2012.
Neymar, Alonso and Adriano have denied wrongdoing.