Messi tax affairs back under Spanish scrutiny with focus now on his non-profit foundation

January 16 – Has Lionel Messi done it again? The diminutive Argentine keeps scoring and evading his opponents on the field, but off the pitch he may not be as adept at evading tax obligations in Spain, according to various media reports. 

Lionel Messi is at the centre of another tax fraud scandal. It’s not the first time that Messi and his father Jorge Horacio, who both have criminal records, have been accused of questionable business practices. The Argentine superstar was handed a prison sentence of 21 months prison sentence in the summer of 2016 for evading €4.1 million in taxes through the use of offshore companies. He hid €10 million from the authorities, but didn’t have to serve the sentence as it was a first offence.

This time the FC Barcelona player and his dealings have been exposed by reports in Spanish daily El Mundo and in leading German magazine Der Spiegel, which obtained confidential documents from Football Leaks. Spanish tax authorities are investigating the link between Lionel Messi’s non-profit foundation and payments made by the club.

El Mundo claims that Barcelona donated at least €12.5 million to the foundation between 2010 and 2016, amounting to more than 70% of the foundation’s revenue. These money transfers were discovered by agents from the Agencia Tributaria, Spain’s tax office. Spanish law requires that 70% of a charity’s revenue should be spent in relation to its founding purpose.

The foundation’s aim is to help children in need. On its website, the foundation writes that it “was created in 2007 with the wish that all children should have the same opportunities to make their dreams come true, and to promote equality in education and health.” Der Spiegel highlights “the questionable business practices the Messi clan engages in.”

The authorities suspect Barcelona’s donations to the foundation are de facto salary payments and demanded all club documents relating to payments made to the foundation in the years 2010 to 2013.

The leaked documents also show that FC Barcelona stepped in to pay Messi’s €12 million settlement to avoid another trial through a flimsy loan and bonus construction.

Barcelona has gone to great lengths to keep their global star, key to the club’s marketing strategy and soft power, happy. His new contract with the club was dated on the day of the star player’s wedding on June 30, 2017. Barcelona guaranteed Messi an annual income of more than €100 million, including his salary and the income from his own image rights. Letting Messi go would have been a nightmare scenario for the Catalans, one that they seemingly wanted to avoid at all costs.

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