Messi vs. Ronaldo: Tax Fraud
Lionel Messi and Crsitiano Ronaldo are two of the greatest soccer players the world has ever seen. Every season they step on the field and perform wonders, scoring more than 50 goals and simultaneously breaking each other’s records. Consistency at the highest level for the last decade or so has led to each of them surpassing the incredible 500-goal mark for club and country. Due to the fact that the Argentine forward and the Portuguese striker play for rival teams, Barcelona and Real Madrid, respectively, a heated rivalry has developed between the fan-bases of the two over who is the better player.
Another “battle” has come up between the two, and it has nothing to do with soccer. Something that seems to happen every year is that either Messi or Ronaldo sign a new contract that makes their salary a little higher than the other player, making them the highest paid soccer player in the world. This short reign lasts until the other player, in turn, signs a new contract and overthrows them again a couple months later. Fans have become more and more interested in who is the best paid of the two, and it may be taking a toll on the decision making of the pair.
Messi has recently signed a new contract that will keep him at Barcelona until 2021. This has made his weekly salary skyrocket to $650,000. Earning almost $35 million a year from the club, he still receives even more income from all his sponsors, as well as his image rights, which make his total increase to around $80 million (ESPN, 2016). Living most of the year in Barcelona, Spain, Messi is required to pay the 45% Spanish income tax.
Just last year in July, Lionel Messi and his father Jorge Messi were found guilty for three counts of tax fraud and were sentenced to 21 months in prison. The court had been hearing a case brought by prosecutors who claimed that Messi and his father, used tax havens in Belize and Uruguay as well as shell companies in the U.K. and Switzerland to avoid paying taxes totaling $4.7m on earnings from image rights from 2007 to 2009. The court said that the sentence could be appealed through the Spanish Supreme Court, but it ordered Messi to pay a $2.1 million fine, and his father was dealt a $1.6 million fine for the tax fraud (ESPN, 2016). Under Spanish law, a tax prison sentence under two years can be served under probation, meaning Messi and his father didn’t have to go to jail.
Similarly, Cristiano Ronaldo has been accused by Spanish prosecutors of defrauding the authorities of $17m in unpaid taxes between 2011 and 2014. According to Madrid’s regional state prosecutor, the Portuguese superstar used a shell company in the Virgin Islands in order to hide his total income from Spain’s tax office. Ronaldo did not declare income of up to $29m related to image rights, and only declared $13m of earnings from 2011–14 when his real income was almost $50m (The Guardian, 2017). The prosecutor also went as far as to say that Ronaldo falsely reported income to be coming from real estate, which greatly reduced his tax rate. It seems like Ronaldo learned his lesson as last month, tax officials said he had adjusted his tax declarations and paid an extra $6.9m in 2014.
It is going to be interesting to follow up on the development of these two greats of their sport, and see which one appears more not only in the record books but also in court.
Carlos Sosa, Intern, Soccer Player, Food lover, World traveler