Carlo Ancelotti, Cristiano Ronaldo, Lionel Messi: Why do so many football stars face tax troubles in Spain?

The Brazilian national team coach, Carlo Ancelotti, has been sentenced to one year in prison for tax fraud in Spain related to his 2014 accounts, which covers the period of his first spell at Real Madrid. The decision was handed down in a hearing in the capital, Madrid, this Wednesday.

Ancelotti is the latest in a long line of football stars to face legal trouble in Spain over tax issues – a list that already includes Lionel Messi, Cristiano Ronaldo, Neymar, Jose Mourinho or Xabi Alonso.

However, the sentence is not expected to lead Ancelotti to prison. This is because Spanish law states that any sentence of less than two years for a non-violent crime rarely requires the defendant to serve time in prison if it is a first offence.

Ancelotti joins the list of footballing stars with tax issues in Spain

Carlo Ancelotti was accused by the Spanish Public Prosecutor's Office of failing to pay just over €1m (£860,000) in taxes in 2014, related to image rights.

Although he avoided jail, the coach must pay a fine of more than €386,000 (£330,000) to the country’s tax authorities. He is also barred from receiving public aid or subsidies, and from benefiting from any tax or social security incentives for three years, according to local media.

The Italian requested the application of “compensatory mitigating circumstances” after settling the debt in December 2021. He also faced trial over another €675,000 allegedly evaded in 2015, but was acquitted in that case.

Ancelotti pleaded not guilty to both charges when he testified in April this year. At the time, the prosecution was seeking a sentence of four years and nine months and a fine of €3.2m (£2.8m), according to BBC Sport.

"For me, everything was in order. I thought it was quite normal because, at that time, all the players and the previous coach did (the same)," he told the court.

The image rights trap: how Spanish law trips up top names

In fact, the national team coach is just the latest name on a long list of footballing celebrities with tax issues in Spain. The vast majority of cases are related to image rights.

Spanish tax law applies specific rules to image rights income, and discrepancies in declarations can quickly lead to problems. Many athletes and celebrities have tried to reduce their tax burdens by setting up companies abroad to receive their image rights revenue.

Since many players and coaches earn money from image rights globally — not just in Spain — the current Spanish system struggles to establish what portion is taxable domestically, as there is no fixed percentage laid out in the law.

Previous high-profile tax cases in Spain

Lionel Messi was fined €252,000 (£217,380) and given a 15-month prison sentence in 2017 for allegedly hiding €4.1m (£3.5m) with his father Jorge between 2007 and 2009. The funds were reportedly linked to image rights and routed through tax havens.
Jose Mourinho was sentenced to one year in prison and fined €182,000 (£157,000) plus €2m (£1.7m) in 2018. He was accused of hiding €3.3m (£2.9m) during his time as Real Madrid manager between 2011 and 2012.
Cristiano Ronaldo faced similar accusations in 2019. He agreed to pay a fine of €18.8m (£16.2m) and received a 23-month sentence (which he did not serve) for tax evasion between 2010 and 2014, again linked to image rights.

Other high-profile football figures to face tax troubles in Spain include Luis Figo, Marcelo, Samuel Eto'o, Luka Modric, Javier Mascherano, Xabi Alonso, Diego Costa, and Fabio Coentrao.

Neymar was also involved in legal proceedings, although in his case the allegations stemmed from his 2013 transfer from Santos to Barcelona. Spanish prosecutors accused the player and eight others of fraud and corruption, after the company DIS—an owner of Neymar’s rights—claimed it had not received its due share. Those charges were dropped in 2023.

This article was originally published on Trivela .