Real Madrid forward Cristiano Ronaldo has reached a deal with the Spanish tax authorities that sees the Portugal captain admit wrongdoing over his image rights income and agree to pay a total of €18.8 million, sources have confirmed to ESPN FC.
Under the terms of a deal first reported by El Mundo on Friday, and which sources close to the player say has been closed between the two negotiating teams, Ronaldo has accepted responsibility for four different breaches of Spanish tax laws and also provisionally accepted a two-year suspended prison sentence.
The final agreement has still to be signed off on both sides — and Ronaldo’s camp may yet get the prison sentence element removed in exchange for a higher fine. The 33-year-old would not have to serve time as, according to Spanish law, a sentence of such a length for a first offence can be served on probation.
Prosecutors at Spain’s Hacienda tax authority argued that Ronaldo and his advisors used a network of companies in various locations, including Ireland and the British Virgin Islands, to evade paying €14.7m in taxes due on image rights income earned between 2011 and 2014.
The player and his representatives had always strongly denied any wrongdoing, with their position being that all taxes due to the Spanish authorities had been paid in full.
During a 90-minute court hearing in July 2017, Ronaldo strongly rejected any wrongdoing and told judge Monica Gomez Ferrer he felt victimised by the Spanish authorities — and such treatment played a part in the ex-Manchester United player wanting to leave Madrid and return to England, where he never had such problems.
However, the new agreement between Ronaldo’s camp and the prosecutors at the tax authority includes an acceptance that €5.7m is owed in taxes on his image rights income along with a further €13.1m in fines and interest.
Ronaldo currently earns an estimated $93m, or €80.1m, a year, according to Forbes, with approximately half coming from image rights deals with his many sponsors.
Spanish courts have recently cracked down on tax evasion among leading footballers. Barcelona’s Lionel Messi was handed a 21-month prison sentence in 2017 on similar charges but, under Spanish law, was able to exchange the penalty for a fine.
Other clients of Ronaldo’s Gestifute agency have also been pursued by the Spanish tax authorities. United manager Jose Mourinho denied he owed any further taxes when he appeared in court in Madrid in October 2017, and players Radamel Falcao, Fabio Coentrao, Pepe, Ricardo Carvalho, and Angel Di Maria have all also had similar image rights issues.
Between 2005 and 2010, foreign players in Spain were protected under the so-called “Beckham law,” allowing them to curb their taxes. But as the financial crisis bit deeper, that exemption was lifted, paving the way for the cases.
Dermot Corrigan is a Madrid-based football writer who covers La Liga and the Spain national team for ESPN FC. Follow him on Twitter @dermotmcorrigan