Ex-Footballer Accused Of $2.5 Million Spanish Tax Fraud

Robbie Lawther Reporter 26 March 2018

Ex-Footballer Accused Of $2.5 Million Spanish Tax Fraud

The former Real Madrid star is the latest in a long list of footballers being in tax fraud cases in Spain.

Former Liverpool and Real Madrid footballer Xabi Alonso is facing a possible five-year jail term after Spanish authorities accused him of tax fraud, adding to a run of players accused of such misconduct,  according to media reports.

Prosecutors say he owes nearly €2 million ($2.4 million) in tax related to earnings from his image rights that he failed to declare. Alonso denies any wrongdoing.

The income relates to the period from 2010 to 2012, when the former Spanish international was playing for Real Madrid. The same sentence is being sought for the player's financial advisor, Ivan Zaldua, as well as the manager of the Portuguese company he allegedly used to avoid tax.

Prosecutors are also seeking a fine of €4 million and demanding Alonso pays back the sum that was allegedly denied to the Spanish tax office. The Madrid court in charge of the investigation reopened the case in 2017 and said the allegations against Alonso had been "sufficiently substantiated". 

The midfielder, who joined Real Madrid in 2009, is the latest in a string of footballers to be pursued by the Spanish tax authorities. Other footballers who have been accused of tax fraud in Spain include:

- Real Madrid player Marcelo, who was accused of tax fraud totalling €490,000 in a case dating back to 2013; 

- Barcelona and Argentina footballer Lionel Messi, who was handed a 21-month suspended jail term. His father Jorge, who manages his finances, was also convicted; 

- Barcelona defender Javier Mascherano - also an Argentine - who admitted tax fraud, escaping a jail term with a one-year suspended sentence; 

- Real Madrid and Portugal player Cristiano Ronaldo, who denies the accusation of evading millions of euros; and 

- Manchester United manager José Mourinho, who is accused of irregularities while he was Real Madrid coach from 2011 to 2012, which he denies.

Footballers in Spain have been investigated by the tax authorities in recent years because of the abolition of the Beckham Rule for professional footballers. When David Beckham went to Spain to play for Real Madrid in 2003, a special Spanish tax system (Regimen especial para Trabajadores Desplazados) was set up for him so he did not have to pay tax on his worldwide image rights. This system was extended to people moving to Spain, although in an ironic twist, professional footballers were excluded from the scheme from 1 January 2015.

"Xabi Alonso is facing criminal charges for tax avoidance. This is not a tax audit; he is being accused of a crime and faces up to five years in prison,” said Miles Dean, managing partner at Milestone International Tax. "As we have seen in other recent cases, such as the charges brought against Cristiano Ronaldo and Lionel Messi, football players are seen as easy targets by the Spanish tax authorities because of their use of aggressive tax avoidance schemes. The Spanish authorities are using these high-profile cases to signal to all taxpayers that they will persecute and truly punish those that don’t pay their taxes, whoever they may be. It is also important to note that Spanish criminal law allows prosecutors to link financial advisors to the crime. If the advisers’ advice results in a crime being committed they may therefore be condemned and liable for harsh penalties.”

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