Ronaldo – Tax Case

The recent Ronaldo tax case is a very interesting study. There is no question Ronaldo was acting on the advice of his professional advisors, yet he, not his advisors is the one left with a criminal conviction, a two-year suspended jail sentence and a payment for €18.9 million (£16.8 million) to settle his tax fraud case with Spanish authorities.

Ronaldo was accused last year of not paying €14.8 million in taxes between 2011 and 2014 using a shell company in the British Virgin Islands to disguise income earned on his image rights.

Ronaldo was shown to have benefited from a British Virgin Islands (BVI) company.

This was used to receive image royalties, prior to his becoming resident in Spain, allowing him to avoid income tax on foreign income.

In an article for Economia, Miles Dean, managing partner of Milestone International Tax, suggests the settlement may not be the end of the case

‘Ronaldo claimed the benefits of the Beckham law, which exempts non-Spanish source income for a period of six years, Dean noted.

‘If the BVI/Irish structure actually had non-Spanish source income then Ronaldo has been stitched up. However, if [he] received Spanish source royalties, Ronaldo is bang to rights and should sue his advisers.’

Earlier this year, Ronaldo rival and fellow Ballon d’Or winner Lionel Messi also settled a similar tax fraud case.

HMRC in the UK has launched its own investigation into 181 footballers over tax avoidance claims following the landmark Spanish cases. This is a story that will rumble on for some time to come.

IYE Global offers all of our clients the opportunity to have their proposed investments or projects investigated fully before they decide to engage or not. If you would like to take to us about an investigation please call +44 (0)20 8914 7923 for a confidential conversation, or fill in our contact form and we’ll call you back.