Lionel Messi: From Prison to Paying a Fine for Tax Fraud

Lionel Andres Messi has won six Ballon d’Or awards, 33 trophies, named the FIFA world player for five years. Is an endorser of multi-billion companies such as Adidas, Pepsi-Cola, Procter & Gamble, the Kuwait Food Company, and food giant Danone and is also a tax evader?

The Player

In July 2016, Lionel Messi and his father, Jorge Messi, were found guilty of avoiding to pay $4.5 million or 4.1 million euros in taxes from earnings from his 2007-2009 image rights and endorsement deals. Investigations led to discovering shell accounts and offshore companies in Belize, Uruguay, Britain, and Switzerland, where the Messi’s kept the earnings. Lionel’s lawyers argued that Lionel was a minor when the contracts were signed and not fully aware of them.

After a lengthy three-year trial and process, he was sentenced by the Spanish courts to serve a 21-month prison term on tax fraud charges. His father was sentenced to 15-months. Since prison sentences that fall under a two-year period for a first-time offender are automatically suspended and placed on probation, Lionel would only be required to pay two million euros and his father 1.5 million euros in fines, including the back taxes and interests. Lionel Messi and his father voluntarily paid five million euros and would no longer have to spend time behind bars.

Spanish Taxes

The legal system in Spain works differently than in most countries, which has resulted in players leaving. So when the El Mundo newspaper released details on Messi’s new four-season contract that would earn him $671 million. These leaked reports prompted Spanish League President Javier Tebas to comment that if Messi made that amount, $326 million or 270 million euros, which is half would go to paying taxes. These include his incomes, wealth tax from his advertising contracts, and image rights. Whereas if Messi had played for Italy, he would only have to pay $163 million or 135 million euros.

According to Tebas, this has put soccer players at a significant disadvantage. Messi, who has been working hard and playing for Barcelona for two decades, has been interviewed, saying that these events have been very upsetting for him and his family. He has asked to leave at the end of the season.

Spain produces football players such as Lionel Messi that earn millions and contribute to 1.37% of the country’s GDP. These players generate around 180,000 jobs and bring in millions of fans worldwide. Maybe it is finally about time that the Spanish government should consider making some tax rules adjustments before more valuable talents start signing contracts elsewhere.

Other football players who have also had their taxes questioned are Cristiano Ronaldo, Javier Mascherano, and Neymar da Silva Santos along with his parents. Ronaldo moved to the Italian team, Juventus and Neymar eventually left to play for the French club, Paris Saint-Germain.

If you want to read more about celebrity tax evasion stories or need advice from a tax resolution specialist, contact Golden Tax Relief today!

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