14th August 2017
The Cristiano Ronaldo tax evasion case rolls on. Regular readers of our blog – and anyone familiar with the global tax arena – will probably be aware that the Portuguese superstar has landed in hot water for alleged tax evasion and recently appeared in court to defend himself.
Ronaldo tax evasion
The news may have come as somewhat of a shock to those who had become familiar with Ronaldo’s clean image. He is renowned for his fitness levels, doesn’t drink alcohol and even refuses to get tattoos as it could impact his ability to donate blood. However, the ongoing trial has threatened to muddy his otherwise relatively reputable persona, for a footballer at least.
The charges stem back to accusations that Ronaldo created a business in 2010 to hide his income from image rights in Spain which led to a ‘voluntary failure’ to comply with his tax obligations. This has led to four charges being filed against him by Spanish authorities who accused him of “creating a screen in order to hide his total income.”
Ronaldo has refuted these suggestions and earlier this month appeared in court to defend himself. In a 90 minute closed-door hearing he answered the questions of investigating Judge Monica Gomez in Pozuelo de Alarcon, the upmarket suburb in which he lives. The Portuguese star insisted he had done nothing wrong, saying, “I have never hidden anything, and never tried to avoid taxes.” He later took to Instagram to insist that “People are only bothered by my brilliance,” however it remains to be seen whether this quote contributes to his overall defence.
Football tax evasion cases mount
Unfortunately, the Cristiano Ronaldo tax evasion case is far from the first involving a footballer. It seems as if every month the list expands and in the space of the past year, Neymar, Angel Di Maria, Javier Mascherano and both Newcastle and West Ham United football clubs have been hounded by the tax authorities. And, in a case that must worry Ronaldo, his arch-rival Lionel Messi was also given a two-year suspended sentence and a £3.5m fine for his role in a scheme not too dissimilar to the one he is currently being investigated for.
Both parties have argued that their image rights status was protected by Spanish law at the time they set up companies to channel their income. However, since then the law has changed, leaving both players exposed to backdated charges. Many have suggested that the fact the legal ground essentially shifted underneath the two players means their charges are unfair, however this is hardly likely to dissuade authorities who are intent on reclaiming lost revenue.
To put it bluntly, if someone with the financial wealth, resources and clout of Cristiano Ronaldo can’t escape sanctions for alleged tax evasion, then what chance does a recruitment consultancy really have? It’s simply not worth taking the risk and with HMRC becoming ever more trigger-happy when it comes to litigation, it’s highly likely that any firm found to be breaking the law either intentionally or otherwise will face at the very least a major fine and potentially even a prison sentence. Lionel Messi narrowly avoided prison and if you’re at all unsure about your tax status then make sure you get in contact with the specialists.