July 27 – Spanish tax authorities have struck a deal with Cristiano Ronaldo whereby he will plead guilty to tax fraud and pay a fine of close to €19 million.
The agreement means the Portuguese star will get a reduced prison sentence that is likely to be suspended. In Spain, a judge can suspend sentences for two years or less for first-time offenders.
Ronaldo had already reached a tentative deal with the state prosecutor’s office on the eve of the World Cup but Spain’s tax authorities had yet to sign off the agreement.
Last year, he was accused of hiding income of more than €150 million through image rights from the Spanish tax office between 2011-14. The four counts of tax fraud amounted to €14.7 million but do not involve his salary from his former club Real Madrid.
Ronaldo, who has denied any wrongdoing, left Madrid this month to sign for Juventus. He will not serve any time in prison but will pay back the full amount of tax, plus interest, to the Spanish treasury.
“The accused made use of a corporate structure created in 2010 to hide from the tax authority income generated in Spain through image rights,” prosecutors said in a statement at the time of the accusations.
“I have never hidden anything, and never tried to avoid taxes,” Ronaldo responded during a closed-door hearing last July.
The pact means Ronaldo can move to Juve without facing trial or having a possible jail term having over him. But he will have to appear in Madrid’s provincial court to seal the deal according to reports.
Commenting on the settlement, leading international tax lawyer Miles Dean, Managing Partner of Milestone International Tax, explained: “It appears Cristiano Ronaldo set up and owns, either directly or via a trust or foundation, a British Virgin Islands (BVI) company. Ronaldo has then sold and/or assigned his image rights to said BVI company, prior to becoming resident in Spain.
“This BVI company licenses the image rights to Multisports Image Management (MIM), an Irish company subject to Irish corporation tax. Ronaldo doesn’t own or control MIM – it is an unrelated third party licensing company that exploits the image rights.”
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