Messi isn’t the only Barcelona icon ensnared in a tax case. Former Barcelona stars Rivaldo and Luis Figo were ordered to pay civil penalties of 2.8 million euros and 2.5 million euros, respectively, for violating Spain’s tax code by receiving more than 15 percent of their income from the team through image rights from 1997 through 1999. Rivaldo, who routed most of the money offshore to Gibraltar via the Netherlands, lost an appeal in February, while Figo’s appeal was denied last year.
Barcelona Icons
Barcelona “rigorously” complies with the 15 percent cap for image-rights compensation, said a club spokesman, who asked not to be identified. He declined to comment on the cases of Messi, Rivaldo and Figo.
Rivaldo and Figo denied the prosecutors’ claim that money they received for their image rights should have been treated as salary for tax purposes, according to court papers.
Figo didn’t respond to a request for comment via his Lisbon-based foundation. Rivaldo’s current club, Brazil’s Sao Caetano, didn’t respond to a request to speak with him.
Britain is getting tough on soccer, too. The English Premier League negotiated settlements in 2011 and 2012 with the U.K. government on behalf of most of the league’s teams to pay years of back taxes. The teams had avoided millions of pounds in payroll and health insurance taxes by paying players’ salaries through image-rights companies, Clay said.
British tax authorities also went after Glasgow Rangers of the Scottish Premier League, which avoided the same taxes by paying players through employee benefit trusts. Under side agreements not disclosed to the league, players could borrow from the trusts without paying interest and with no expectation of repayment, according to a report by a U.K. tax tribunal, which gathered evidence from 2010 to 2012. The club maintained that it didn’t owe taxes because the payments were loans.
Well Oiled
“The machinery was pretty well oiled,” testified one former player whose identity was kept secret by the tribunal.
Rangers, which won the Scottish league a record 54 times, declared bankruptcy in February 2012, owing more than 93 million pounds ($149 million) to HMRC, the U.K. tax agency. Its ownership company was liquidated, and the team was relegated to Scotland’s third division last season.