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Sports image rights: Ronaldo fined for tax fraud

By Athena Constantinou, managing director, APC Sports Consulting, Nicosia, Cyprus In a guilty plea bargain, approved by a Spanish Judge in Madrid on 22 January 2019, Cristiano Ronaldo has settled a tax fraud case brought by the Spanish Tax Authorities involving the commercial exploitation of his image rights from 2011 -2014, worth €14.7 million, whilst he was a member of Real Madrid Football Club, for whom he played from 2009 to 2018. He now plays for the Italian Club Juventus and is a five-times winner of the FIFA World Footballer of the Year Award. By pleading guilty, he has avoided actually serving a jail sentence, which was suspended, and he has also paid a fine of €5.7 million, plus interest of €1 million, in addition to the taxes, amounting to €14.7 million, claimed to be owing by the Spanish Tax Authorities. He is alleged to have avoided these taxes through using shell companies in the British Virgin Islands and the Republic of Ireland, both tax friendly jurisdictions. Whatever the rights and wrongs of this high-profile case, one can say, with some degree of confidence, that, had he arranged his tax affairs properly, that is, through entities with real commercial substance and purpose, he could have mitigated his heavy tax burden arising out of the sale of his very valuable sports image rights. This is a very specialised area of international tax law and highly sophisticated and expert professional advice and guidance is necessary to meet the challenges posed in this controversial field of business practice. One should reiterate that tax evasion is a crime; whilst tax avoidance, that is, arranging one’s financial affairs in the most tax efficient and legitimate manner, is not. In fact, it is perfectly legal. Athena Constantinou may be contacted by e-mail at ‘This email address is being protected from spambots. You need JavaScript enabled to view it.

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