19th February 2018
It seems that barely a week goes by before we’re once again on the subject of the latest footballer tax scandal. This time it’s Alexis Sánchez who is in the firing line of Spanish authorities.
Footballer tax scandal
Following on-going investigations into the star’s financial activity between 2012 and 2013, the Spanish prosecutor’s office confirmed earlier this month that Sánchez had been sentenced to two separate eight-month prison terms for tax evasion.
Fortunately for the Manchester United forward, however, his sentence is suspended for two years. The footballer will instead have to pay back the €1 million in taxes he has been accused of defrauding through hiding income from image rights plus interest, along with a fine of €590,065.
Authorities getting tough
Following the announcement, Sánchez’s representative made a statement suggesting that Spanish authorities are pressuring football stars to accept ‘unfair’ agreements. Whether or not this is true, the fact remains that international governments are increasingly making examples of wrong doers as they attempt to recover funds lost through tax evasion. And we can almost certainly say that Sánchez won’t be the last celebrity to be penalised.
What recruiters can learn from football
For recruitment firms working with international contractors, this example – and the many others from the world of football – demonstrate that the risks associated with cross-border contracts are growing. Not only will recruiters need to manage the increasing concerns and questions from professionals surrounding their compliance with local tax laws, but they’ll also face potential penalties themselves.
In the UK, for example, the recent introduction of the Criminal Finances Act will see associated parties of fraudsters facing criminal charges and sanctions if they fail to demonstrate that the right processes were put in place to prevent the facilitation of tax evasion. Whether or not an agency is a knowing or willing party they can be prosecuted if their contractors are evading tax, wherever in the world they are working.
As contracting internationally continues to grow in popularity, global authorities are being forced to amend regulations to ensure they are both relevant to the changing employment landscape and also prevent tax evasion. In such a complex and ambiguous environment, it’s now imperative that recruiters put tax and compliance in the hands of experts. Speak to our team today to find out more about our services.