Tax evasion has tripped up former Real Madrid soccer coach Carlo Ancelotti.
Ancelotti has led an illustrious career in soccer, both as a player and a manager. As a midfielder, he won two European Cups and was the first manager to win each of the five European soccer leagues. He is now coaching Brazil's national team and i is widely known as one of the sport's most successful leaders.
In 2021, the International Consortium of Investigative Journalists (ICIJ) released information from the Pandora Papers, a 2.94 terabyte leak that included about 11.9 million records from 14 entities serving the financial elite. The files revealed offshore dealings by Ancelotti, who reportedly used several entities to receive payments for some of his business activities.
Other soccer players and athletes also were named in the Pandora Papers for using offshore tax arrangements to manage their wealth. Using offshore tax havens and foreign bank accounts can be legal for tax avoidance, but it becomes a problem when it crosses into tax evasion.
Spanish tax regulators said Ancelotti failed to pay tax of one million euros while working with Real Madrid from 2013 to 2015. He denied that he had willfully committed fraud, saying, "I thought it was quite normal because at that time all the players and the previous coach had (done the same)." He paid the arrears in full by the end of 2021.
Spain aggressively pursues those it believes have not paid their share. Entertainer Shakira and footballer Cristiano Ronaldo both settled tax litigation related to tax evasion out of court, as did Lionel Messi and his father. Messi was named in the Panama Papers, while Shakira appeared in both the Panama and the Paradise Papers. In all of those cases, including Ancelotti's prison sentences were suspended because Spanish courts rarely jail first-time offenders or those sentenced to less than 24 months.
Tax regulations can catch up with you anywhere in the world, particularly Spain. If you have questions about your offshore exposure, speak with an experienced tax attorney who represents international investors.
Concerned about offshore tax compliance?
If you have offshore holdings and are unsure about your reporting obligations, seek legal guidance before the Internal Revenue Service (IRS) comes calling. Failing to disclose foreign assets can lead to steep penalties and even criminal charges. Our experienced tax attorneys can help you navigate offshore tax compliance and mitigate potential risks. Schedule a consultation or call us at 440-250-9709. We serve clients across the U.S. and internationally from our offices in Cleveland and Chicago.
For a deeper understanding of offshore tax regulations and the potential risks of non-compliance, download our free "Offshore Tax Matters Explained" ebook.
