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Soccer star Lionel Messi accused of tax fraud

Soccer star Lionel Messi accused of tax fraud

On Wednesday, Argentine soccer star Lionel Messi and his father, Jorge Horacio Messi, were formally accused of tax fraud worth €4 million ($5.3 million) by the Spanish Inquisition public prosecutors in Barcelona. 

El País reports:

[The charges] relate to a failure to declare part of the star’s earnings from his image rights in tax declarations made between 2007 and 2009….

According to the suit, it was Messi’s father who came up with the alleged tax avoidance "strategy," which the player "ratified" when he turned 18. The scheme purportedly revolves around "pretending" to transfer the Barcelona player’s image rights to front companies in the tax havens of Belize and Uruguay.

The setup, said public prosecutor Raquel Amado, allegedly allowed Messi’s earnings to be transferred from the companies paying for his image rights to the tax haven-based businesses without being subject to barely any tax and without the knowledge of the Spanish tax office.

Messi, winner of FIFA’s Ballon d’Or (given to the best player in the world) every year since its inception in 2010, was the 10th-highest paid athlete on the globe last year, taking home an estimated $41.3 million from salary and endorsements.

One might wonder why someone making so much money would feel the need to commit tax fraud (assuming the allegations have merit), but this kind of chicanery has long been common in Spain, where the government has traditionally taken a "don’t ask, don’t tell" approach of sorts to its wealthier residents’ tax returns. In recent years, however, authorities have cracked down on tax evasion as part of the government’s larger effort to reduce the deficit. It appears Messi got caught up in this campaign.

Moreover, while frowned upon, tax evasion is not exactly unheard of in the world of international soccer. In 2011, reports suggested that top English players such as Manchester United’s Wayne Rooney and Arsenal’s Theo Walcott were involved in a tax scheme of dubious legality, while Diego Maradona, Messi’s mentor and fellow Argentine, still owes around $50 million to the Italian government in unpaid taxes and interest.

Messi, in a statement posted to his Facebook page, has denied the allegations:

We have just learned through the media about the claim filed by the Spanish tax authorities. We are surprised about the news because we have never committed any infringement. We have always fulfilled all of our tax obligations according to the advice of our tax consultants, who will take care of clarifying the situation.

In the meantime, here’s a video of a wonderful Messi goal and even more wonderful commentary by Ray Hudson: