It was also agreed that he will take a two-year suspended jail sentence, the Spanish media and the Associated Press reported.
The tentative agreement was made public in June, with prosecutors reportedly calling for a reconsideration of the provisional agreement and the Gestha Union asserting that the amount agreed was insufficient.
However the agreement is now expected to be formally confirmed once Ronaldo appears before the provincial court in Madrid.
The original amount of €14.7m in unpaid tax on image-rights income was reduced to €5.7m when Ronaldo conceded to four charges against him for tax evasion, according to reports. It now totals €18.9m with fines and interest.
Miles Dean, tax lawyer and 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.”
Dean described how the image rights were then licensed to Ireland-based Multisport Image Management, not owned or controlled by Ronaldo, and therefore under Irish law can pay most of its income out to the BVI company without deducting withholding tax.
Dean continued, “Ronaldo claimed the benefits of the Beckham law, which exempts non-Spanish source income for a period of six years. If the BVI/Irish structure actually had non-Spanish source income then Ronaldo has been stitched up. However, if MIM received Spanish source royalties, Ronaldo is bang to rights and should sue his advisers.”
Ronaldo is unlikely to serve the prison term unless he re-offends, with Spanish law allowing him to serve the first-time sentences on probation.
In early July the world’s highest paid athlete left Real Madrid after being signed for Italian team Juventus, and the Financial Times reports that this latest agreement will now allow him to make this transition.