Carlo Ancelotti, Sentenced to Prison for Tax Fraud
Former Real Madrid coach Carlo Ancelotti has been sentenced to one year in prison for a crime against the Public Treasury, related to the 2014 tax year. However, he has been acquitted of another similar charge corresponding to the year 2015.
Section 30 of the Provincial Court of Madrid ruled the minimum sentence provided by law, also imposing a fine of 386,361.93 euros. In addition, he has been deprived of the possibility of obtaining public aid or subsidies, as well as the right to enjoy tax benefits or incentives and Social Security for three years.
Before the criminal process, Ancelotti made a payment of 1,400,000 euros to settle his tax debt, including surcharges and interest. Because of this, a part of that amount will be returned to him.
The Prosecution had requested a four-year prison sentence for the current Brazil coach, accusing him of defrauding 1,062,079 euros from the public treasury. This sum is divided into 386,361 euros corresponding to 2014 and 675,718 euros to 2015, during his first stage as Real Madrid coach.
The court determined that Ancelotti used a corporate structure based in the Virgin Islands and London to manage the income from his image rights, 50% of which were assigned to Real Madrid. The club agreed to pay him 1,409,645 euros in the 2013/2014 season and 1,795,575 euros in each of the following two seasons.
Regarding the 2015 fiscal year, the court acquitted the defendant, as it was not proven that he resided in Spain for the time required by law to be obliged to pay taxes. Ancelotti established his legal residence in London in April of that year, after being dismissed by Real Madrid, although he maintained a residence in Madrid.
During the trial, Ancelotti stated that he never intended to defraud and that he acted according to the instructions of the club and his advisors. He requested his acquittal and, in case of conviction, the application of mitigating circumstances for damage repair and undue delays.
The court will notify the tax agency of the sentence so that it can make the relevant adjustments to the amounts paid by the coach.
The coach’s defense expects a significant financial refund. It is estimated that, in addition to recovering a portion of the 1.4 million euros paid in 2021, the ruling confirms that his tax residence in 2015 was in London. This could result in a tax refund that could reach 5 million euros.
