Danny McCance 22 Jan 2019 03:32pm

Ronaldo pays €18.8m to avoid jail for tax evasion

The Juventus forward and Portugal captain Cristiano Ronaldo has accepted a €18.8m (£16.5m) fine for tax evasion after making a deal in court in Madrid

He had previously been accused by tax authorities of defrauding €14.8m over four years between 2011 and 2014.

Ronaldo agreed to the deal with Spanish prosecutors and tax authorities, admitting to committing tax fraud while playing for Spanish football team Real Madrid, according to reports.

Along with the fine, he was given a 23-month suspended prison sentence, but will avoid spending time behind bars.

Under Spanish law, a judge can suspend a prison sentence of two years or less for first-time offenders.

He originally agreed to a settlement in June 2018, a year after being accused by the Spanish tax authority, the AEAT, of hiding revenues generated from his image rights.

 At the time he was charged with four crimes committed between 2011 and 2014 following a complaint alleging he’d defrauded €1.4m in 2011, €1.7m in 2012, €3.2m in 2013 and €8.5m in 2014.

 Prosecutors also accused the footballer of falsely reporting that income came from real estate, which lead to a reduction in his tax rate.

Miles Dean, managing partner at Milestone international Tax said that as possibly the world’s best known footballer, Ronaldo is “low-hanging fruit” for the tax authorities.

“The threat of a criminal conviction has led him to strike a deal, when his case should really have been heard in the tax courts, as it would appear that it has merits,” said Dean.

"Like Gareth Bale, Ronaldo went to some effort to implement a structure that was not overtly aggressive, unlike some other lesser known players,” he added.

In October last year, Ronaldo’s former Real Madrid teammate Bale was fined €337,000 by the Spanish Tax Authority for avoiding paying taxes on his image rights in Spain.

 According to reports, Ronaldo was preceded in court by his former Real Madrid teammate Xabi Alonso, who is facing his own tax evasion case.

 In March last year, reports suggested he could face a five-year prison sentence and fine over allegations that he did not declare earnings from image rights.

In 2017, Barcelona striker Lionel Messi was handed a 21-month jail sentence and €2m fine by Spain’s Supreme Court over accusations of concealing earnings made from image rights between 2007 and 2009.

Reports today found that HMRC has increased the number of players and agents under investigation over their tax affairs since the last quarter, and has acquired £355m in additional revenue from its compliance activities in the football industry since 2015, which include tackling tax risks associated with image rights and agent fees.