The Prosecutor's Office requests four years and nine months in prison for Ancelotti for defrauding one million euros with image rights

Manuel Marraco Madrid

Madrid

Updated Wednesday, March 6, 2024-10:27

The Madrid Provincial Prosecutor's Office has requested four years and nine months in prison for the Real Madrid coach,

Carlo Ancelotti

, for having defrauded the Treasury of 1,062,079 euros in the fiscal years of 2014 (386,361 euros) and 2015 (675,718 euros).

In the indictment presented, the prosecutor attributes two crimes against the Public Treasury, since during his first stage as coach he only included in his income tax returns the personal work remuneration received from Real Madrid, but omitted the performance corresponding to the exploitation of its image rights that it had transferred to other entities.

The letter sent to the court explains that on July 4, 2013, Ancelotti signed an employment contract as a coach until 2016, "specifying in his remuneration for that period, in addition to work performance, income derived from the transfer of the rights of image to the club".

During that period, he established his habitual residence in Madrid.

Even when the coach ended his relationship with Real Madrid early in May 2015, he kept his home rented until October, so during 2015 "Spain was his main center of personal relationships and economic interests."

This circumstance allows attributing a second tax crime corresponding to that year.

This is a point on which the Prosecutor's Office disagreed with the court that investigated the case, which estimated that during that year he could not be considered a tax resident in Spain, from where he left for Germany to coach Bayern.

Simulation

The Prosecutor's Office explains that, "in order to avoid taxation on the income from said image rights" - both those received by Real Madrid and other brands -, the coach resorted to a "complex" and "confusing" network of trusts and companies filed to channel collection.

It states that Ancelotti "simulated" the transfer of his image rights to entities "lacking real activity" and exploitation capacity that were domiciled outside of Spain, "thus pursuing opacity in the face of the Spanish Public Treasury and the concealment of the beneficiary." of the income from his image rights, so that neither he himself nor any of said companies would have to pay taxes on the large amounts received in Spain or outside our country".

As detailed by the Public Ministry, Ancelotti signed a private contract on July 1, 2013 in which he transferred his image rights to the entity Vapia Limited for a period of 10 years and a price of 25 million.

A day later, the entity names the Real Madrid coach as his representative, "granting him maximum powers to manage his image rights."

Later, an annex to the agreement was formalized that modified the duration of the agreement, reducing it to three years and the purchase price of the image rights, reducing it to one million.

On July 4, 2013, "parallel" to his signing as coach of Real Madrid, the accused was granted a private contract with the club in which he transferred 50% of his image rights to the sports entity during the three years of signing.

The other 50% was held by an "unnamed" and "undetermined" company that acted in the name and representation of the Italian coach.

That company turned out to be Vapia LLP, domiciled in London, and not Vapia Limited, a company incorporated in the Virgin Islands, a circumstance that was not communicated to Real Madrid until a year later.

"In this way, the accused used the company Vapia LLP so that it formally presented itself to Real Madrid as the owner of the image rights even though it had not even been formally attributed them, since the aforementioned transfer contract of 1 of July 2013 was with Vapia Limited," the letter adds.

In that period, Ancelotti omitted in his statements to the Treasury "all income corresponding to the exploitation of his image rights (...), thus arriving at statements with negative quotas" with a negative balance of 39,575 euros in the year. 2014 and 529,076 in 2015, amounts that were returned by the Tax Agency in both cases."

The Prosecutor's Office specifies that the income derived from the transfer of image rights represented income amounting to 1,249,590 euros in 2014 and 2,959,768 in 2015, without Ancelotti or the other two entities having paid taxes on these amounts.

Added to this is that the technician also omitted in his statements the ownership of two real estate properties abroad.

After making the corresponding adjustments, the Spanish Treasury calculated the damage suffered based on omitted income and returns obtained at 1,062,079 euros.