Neymar: Football’s man in the spotlight in tax fraud scandal

18th May 2017

Along with the introduction of the Common Reporting Standard and the Panama Papers scandal, Barcelona footballer, Neymar has been one of the most commonly featured topics of our blogs in recent months.

Tax fraud scandal

The Brazilian superstar and his parents have been dogged by claims that they have committed alleged fraud and corruption along with Barcelona President, Josep Maria Bartomeu and his predecessor Sandro Rosell who will all stand trial for wrongdoings related to the player’s transfer from Santos in 2013. In addition, the two clubs were also ordered to stand trial although all parties have denied the charges.

It’s undeniable that Neymar has been a huge success since joining the Catalan club – in fact he was the catalyst behind Barcelona’s incredible turnaround against Paris St Germain in March – however claims related to his alleged tax fraud have followed him from the beginning of his time in Spain.

Brazilian investigation

The case began with a complaint from the Brazilian investors, DIS, which – in a situation only seemingly acceptable in the football world – owned 40% of Neymar’s rights at the time of his transfer. The firm received €6.8m, which amounted to 40% of the €17m fee paid to Santos. However, DIS insists that the real value of the transfer was considerably higher and as a result it was being denied its real share because part of the fee was concealed by Barcelona, Santos and the Neymar family.

The Spanish courts suspect that the real value of the transfer was closer to €25m, which would mean that DIS was cheated out of €3.5m. To complicate the issue even further, Barcelona initially declared the transfer figure as €57.1m, with €40m going directly to the player’s family and the rest to Santos.

The case must go on

In July 2016 a judge ruled that the issue was for the civil, rather than criminal, court to settle, however prosecutors successfully argued that the player and his father were aware of potentially fraudulent dealings between Barcelona and Santos to the detriment of DIS.

The ruling is yet another huge blow to Barcelona’s image as well as Neymar himself. The club attempted to close the issue last June by paying a €5.5m fine, however this hasn’t helped the situation.

Regular readers of our blog will know that the Brazilian is far from the first Barcelona player to land himself in hot water and his team mates Lionel Messi and Javier Mascherano have been awarded suspended jail sentences related to tax fraud. If anything, these cases highlight that no one – regardless of their success, popularity or wealth – is safe from the tax authorities and unless your firm wants to face the sort of fines that Barcelona have been on the receiving end of, it’s essential to partner with a specialist to ensure that you remain on the right side of the tax law wherever you’re operating.

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