What is it with superstar soccer players plying their trade in Spain and Tax Fraud? As the tax fraud cases against Barcelona's star duo Lionel Messi and Neymar Junior continue, Real Madrid and Portugal star Cristiano Ronaldo now finds himself in the eye of a tax storm. A prosecutor in Spain accused the current holder of the Ballon d'Or of committing tax fraud to the tune of $16.5 million.
A multi-million dollar problem
According to a report in the Washington Post, the prosecutor has alleged that the player defrauded the Spanish tax authorities over a period of four years through a subterfuge that has been used by other footballers in the past.
The tax avoidance scheme went on from 2011 to 2014. It is alleged that the player used a Virgin Islands-based shell company to take care of his lucrative image rights and then routed these earnings through another shell company in Ireland to complete the subterfuge.
The prosecutor has alleged that Ronaldo defrauded the Spanish government to the tune of $1.57 million, $1.91 million, $3.59 million, and $9.53 million (all figures converted to USD from Euros). It is without doubt a serious allegation, and before long it might snowball into a big headache for the player. There has been no response yet from Ronaldo or his representatives, but one can expect that they will likely release a statement in the coming days.
A problem for soccer players?
Barcelona's legendary star -- and Ronaldo's great sporting rival -- Lionel Messi had recently been found guilty of a similar tax avoidance scheme that involved shell companies and image rights. Messi was found guilty and he ended up paying a big fine. In fact, he had also been sentenced to prison for 21 months but it was suspended.
It raises the question of whether this is a problem with soccer stars, who earn close to half a million dollars a week, and earn millions more through endorsements. According to Forbes, Lionel Messi earns $80 million a year, which is 3rd on their list of the world's highest-paid athletes. However, with an income of $93 million, Cristiano Ronaldo is the highest paid athlete in the world, and that is why it raises serious concerns over whether these tax avoidance schemes are a larger problem. More importantly, if such highly paid soccer stars could be involved in such elaborate tax avoidance schemes, it brings into question what soccer players lower on the totem pole might be up to.
