Real Madrid coach Carlo Ancelotti is set to stand trial next Wednesday in Madrid, facing accusations of defrauding the Spanish tax authorities out of over one million euros. Prosecutors are seeking a prison sentence of four years and nine months for the Italian manager.
Specifically, Ancelotti is accused of failing to pay €1,062,079 in taxes during the fiscal years of 2014 (€386,361) and 2015 (€675,718), according to the prosecution. The Spanish Tax Agency has already seized €1,217,958.24 from Ancelotti to cover the alleged debt, including penalties and interest.
Prosecutors allege that Ancelotti concealed income related to his image rights, claiming to have ceded them to other entities. The prosecution considers this a fictitious arrangement designed to evade taxes.
How the alleged fraud unfolded
In 2013, Ancelotti signed a contract with Real Madrid that included not only his salary for coaching duties but also compensation for the club’s use of his image rights. However, prosecutors claim that Ancelotti used companies domiciled outside of Spain to hide this income. Through a web of contracts and fictitious transfers, he allegedly ensured that the image rights income did not appear on his tax returns.
Despite these efforts, the Spanish tax authorities detected the alleged fraud. The debt has been recovered through a seizure, but the legal process is ongoing to determine criminal liability.
see also
Trent Alexander-Arnold to Real Madrid before the 2025 FIFA Club World Cup? The feasibility of an early La Liga move prior to Liverpool free agency
The potential impact on Ancelotti
The trial next Wednesday in Madrid is crucial for Ancelotti. If found guilty, he could face a prison sentence of up to four years and nine months. In addition, prosecutors are seeking fines totaling over three million euros.
This trial not only puts Ancelotti’s freedom and career at risk but could also set a precedent in the fight against tax fraud in the sports world, particularly regarding the exploitation of image rights and their tax implications.
The defense’s perspective
While the prosecution paints a clear picture of alleged tax evasion, Ancelotti’s defense team is expected to argue that he complied with all applicable tax laws and that the structures used were legitimate. They may argue that the income was properly declared and taxed in other jurisdictions, and that the prosecution’s claims are based on a misunderstanding of the complex financial arrangements.
A high-profile case with wide-ranging implications
The Ancelotti case is just one example of the increasing scrutiny that soccer stars and coaches face regarding their tax affairs. As the sport generates ever-greater revenues, tax authorities around the world are cracking down on alleged tax evasion.
The outcome of this trial will be closely watched by the soccer world and could have significant implications for how players and coaches structure their financial affairs in the future. It also serves as a reminder that even the most successful figures in the sport are not immune to the reach of the law.
