Tax system in Spain frustrates football stars

Dhaka,  Tue,  19 September 2017
Published : 05 Aug 2017, 22:01:25

Tax system in Spain frustrates football stars

FE Sports Desk

Cristiano Ronaldo has hinted he would like to return to England after revealing his frustration over an investigation into his tax returns.

Ronaldo, who played for Manchester United between 2003 and 2009, has denied charges of evading tax and hiding details of his income from the Spanish tax authorities. Prosecutors allege Ronaldo evaded €14.7 million (£13.1m) in tax.

Top soccer star Lionel Messi has been also dealt a heavy blow by Spain's tax system.

Messi was sentenced to 21 months in prison last month, and Ronaldo is being chased for 14.7 million euros in taxes by Spanish authorities

Messi has registered an offshore company in Panama. But it did not help that Messi's name came up in the Panama Papers. Messi and his father used shell companies to divert income from image rights in order to avoid taxes.

Messi is allowed to pay a fine of about 2 million euros to avoid serving a stretch behind bars.

In fact, he can be seen as an indirect victim of the eurozone debt crisis that broke out between 2009 and 2010.

Spain, one of the five eurozone nations that were considered weaker economically, was required by the International Monetary Fund to tackle its huge government deficit. The Spanish government hiked the top rate of income tax from 45 per cent to 52 per cent for those who earn an annual income above 300,000 euros.

As a result, these football stars need to pay nearly 70 per cent of their income to local tax authorities after paying all kinds of taxes.

Spain had not explicitly banned the use of offshore companies to avoid tax until 2011.

In fact, it is widely believed that Spain's tax agency has deliberately targeted the top football stars in a high-profile legal case, in order to intimidate others to pay their taxes, according to a international media report.

Spain's sports industry, largely dominated by football, generated revenue of 26 billion euros for Spain last year representing 2.4 per cent of GDP. The tax authorities' move could bring the side effect of discouraging football stars to go to Spain, or triggering those playing in Spanish teams to leave.
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