Spanish judge upholds sentence and slams Messi over ‘know nothing’ tax dodge

By Andrew Warshaw

May 25 – Ten months after Lionel Messi and his father were given 21-month suspended jail sentences for tax fraud relating to the player’s image rights, Spain’s Supreme Court has confirmed both the sentence and the €2 million fine imposed on Barcelona’s Argentine superstar.

However, Messi, five-time world footballer of the year, is unlikely to end up behind bars since custodial sentences are regularly suspended in Spain for first offences for non-violent crimes carrying a term of less than two years but the judgement heaps more

Messi and his father Jorge Horacio were found guilty in July last year of using fictitious companies in Belize, Britain, Switzerland and Uruguay to avoid paying taxes on €4.16 million of Messi’s income earned from his image rights from 2007-09.

Both appealed but the Supreme Court upheld the ruling though it reduced the term to 15 months jail for Messi’s father, taking into account that some of the defrauded money had been paid back to tax authorities.

During last year’s trial, Messi had argued that he trusted his father with his finances and “knew nothing” about how his wealth was managed. But the Supreme Court argued that he would have known about his obligation to pay taxes on income earned from his image rights.

In its decision on Wednesday, the court said: “It defies logic to concede that someone who earns a large income does not know that he must pay taxes on it.”

The case will now return to the court in Barcelona that handed down the original judgement.

Spanish authorities have increasingly employed a get-tough policy when it comes to fraud involving high-profile players and officials.  Javier Mascherano and Brazilian star Neymar have also been embroiled in legal proceedings while in the same week as Messi’s sentence was upheld, former president Barcelona Sandro Rosell was arrested as part of a money-laundering investigation.

Messi’s club, as it has done all along, was quick to rally round him.

“The club reiterates, once again, its full support for Leo Messi, his father Jorge Messi, and his family,” said a statement on Barca’s official website.

“FC Barcelona president Josep Maria Bartomeu contacted the player’s family to communicate this support.

“The family was very grateful, not only for today’s gesture, but also for the support the player and his family have received from the club throughout this process. The club will continue to stand with Leo Messi, his father, and his family.”

Messi’s case highlights the thorny issue of image rights in terms of what is, or is not, illegal or acceptable.

International tax lawyer Miles Dean, founding partner of Milestone International Tax Consultants, says it is all about structuring image rights arrangements properly.

“There is no doubt that a player such as Messi has extremely valuable image rights and that it is possible to structure their exploitation in a tax efficient manner,” said Dean.

“However, one might argue that he earns so much from his Barcelona salary that there is no need to go to the lengths that he and his father did to deprive the tax authorities.

“Lest we forget that Spain is bankrupt and the rule of law isn’t adhered to in the same was as say the UK – one could equally argue that he’s been made an example of.

The lesson here is not to risk pushing boundaries and to always seek professional advice.”

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