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Cristiano
Ronaldo and Lionel Messi is a new entry this year
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The temptation is great, even for mere mortals. Who hasn't
thought about adding a meal or a gas bill to their tax
exemption?
But when the Football Leaks exposed the world's most famous
football players to be tax avoiders in December 2016, public
disapproval was widespread. Spanish prosecutors also began to
stock up their arsenal and took a closer look at the tax
returns of high-profile football players and managers.
A collective of 60 journalists from 12 European media
agencies had formed the European Investigative Collaborators
(EIC) and sifted through 18.6 million documents, including
emails and contracts, provided by an anonymous whistleblower,
who calls himself John.
At the time of writing, Messi has scored 584 goals and
assisted 236 in his 726 games for Barcelona and Argentina,
while Ronaldo's stats read 619 goals and 202 assists in 880
games playing for three clubs plus his home country of Portugal
during his career. But it's their tax statistics that caught
the eye of the EIC. Documents showed that Ronaldo, playing for
European champions Real Madrid, had diverted €63.5 million
($75.2 million) to the British Virgin Islands (BVI) in 2014. In
July 2017, Ronaldo appeared before a Spanish court to defend
allegations of evading €14.5 million in taxes from the
sale of image rights to several shell companies in the
BVIs.
Reportedly, Ronaldo accused the judge of picking on him only
because he was famous, to which the judge supposedly answered:
"You are mistaken. Plenty of anonymous people have sat where
you are". The estimates indicate that the bill from back taxes
plus interest could amount to some €50 million.
Earlier in May 2017, a Spanish court had already sentenced
Messi for three instances of tax evasion to a 21-month prison
term, which was later converted to a fine of €2 million.
Prison terms under two years for non-violent offenders are not
generally served in Spain. With a similar offshore structure to
Ronaldo, Messi and his father had channelled income from image
rights to Belize and Uruguay to avoid paying tax in Spain.
But the outrage never lasts very long. You have a season
ticket after all. There's the next game, the next refereeing
decision, the next multi-million euro transfer fee, to discuss
instead.
"The fans have to understand that with every ticket, every
jersey they buy and with every television subscription, they
are feeding an extremely corrupt system that is only in it for
itself," John the whistleblower told German magazine Der
Spiegel.
In a European Commission committee hearing on money
laundering and tax evasion in September, one of the PANA
committee's co-rapporteurs, Jeppe Kofod, criticised the
attitude of FC Barcelona following Messi's conviction, pointing
out the club's social media campaign with the hashtag
#WeAreAllLeoMessi". Members of the same enquiry also accused
FIFA and UEFA officials as "enablers" of the system that allows
players and agents to circumvent taxes.
In its current draft report, the PANA committee included a
new motion for a resolution, noting concern that: "The Football
Leaks revelations and the several individual cases of tax
evasion in the world of football recently discovered have shown
that many loopholes and mismatches still exist in national
legislation regarding the taxation of image rights and the
taxation of footballers' international transfers."
The EU is now under pressure to introduce legislation to
tackle the lack of transparency and strategies for tax
avoidance, including the role advisers play in creating the
schemes.