The complaint has named Messi and his father, Jorge Horacio Messi of defrauding millions on income tax returns for 2007, 2008 and 2009.
16 June 2013
In this article International Finance Magazine, with key inputs from Forbes, gives you the story on Messi’s tax evasion, his earnings as a soccer player and his feedback on evading taxes.
A Spanish Prosecutor has filed a fraud complaint on Wednesday against Lionel Messi, alleging the captain of the Argentina’s National Team and Barcelona’s star centre forward tried to conceal the extent of his real earnings and that he owes 4 million Euros ($ 5.3 million) in back taxes. The complaint was lodged by Raquel Amado, a state prosecutor for the northeastern region of Catalonia. In the complaint Amado has alleged between 2006 and 2009 Messi “obtained significant revenue derived from the transfer to third parties of his image rights, income of which should have been taxed”. Messi “circumvented his tax obligations” by using shell companies in tax havens such as Belize and Uruguay. The complaint also mentions the name of his father Jorge Horacio Messi. A judge at the courthouse must admit the prosecutor’s complaint before charges can be bought against Messi and his father. Earlier last week, Forbes had rated Messi, a mercurial centre forward, known for his candid and lightning strikes in the soccer field, ranks the 10th richest sportsperson in the world. As per information available from Forbes, Messi earns around $ 41.3 million per year, making him the 10th highest paid athlete in the world. Messi earns $ 21 million from endorsement deals, including Adidas. His club salary comes to $ 20.3 million. Only David Beckham and Christiano Ronaldo had higher earnings from soccer.
Messi who is currently representing Argentina in the World Cup Qualifiers said “ We have just been communicated through the media that Spanish tax authorities have filed a claim against us. We are surprised about the news as we have not committed any tax infringement. We have always fulfilled our tax obligations; we will follow the advice of our tax consultants who will take care of clarifying the situation” he said.
Prof. Sandalio Gomez, Sports Finance Analyst at the University of Navarra, said if he is found guilty of evading tax on his image rights, Messi could be liable for a fine amounting to 150 percent of the earnings concealed.
Stefan Szymanski, Professor of Sports Management in the Department of Kinesiology at the University of Michigan said different tax rates and regulations in Europe could prompt Messi to consider playing for a club in a more tax friendlier country. If Spain is going to become as strict as Northern European countries, then maybe that is the point he decides that he is willing to move, he said. Szymanski cited a 2009 study by the London School of Economics and the University of California which found top tax rates influence where soccer players land up.
Spain has been in the middle of a severe economic crisis and has been cracking down on tax defaulters as it tries to repair the public finances and reduce unemployment in the country.
The 25 year old Messi has won four straight FIFA world player of the year awards. The forward has scored more than 60 goals in all competitions this season, also leading Barcelona to the Spanish league title. With Messi, unavailable due to a leg injury, Barcelona crashed out of the Champions League in the semi finals.