Lompat ke konten Lompat ke sidebar Lompat ke footer

3 Reasons Why Tax Cases Often Override Football Players in Spain

LEAPYGUIDE.COMTax problems affecting foreign soccer players in Spain are quite crowded in various media coverage due to big names like Cristiano Ronaldo and Lionel Messi who have to undergo a trial related to tax evasion allegations.

So why is this problem common in Spain? Here are three factors that cause foreign players in Spain has a great chance of tax evasion allegations alleged.

3. Spain's Declining Economic Condition

Various countries in the world are currently experiencing economic difficulties, not least for Spain, which in recent years has decreased significantly since around 2008, when the economic crisis hit various countries in the world.

The crisis caused by the mortgage problems has had an effect on large banks and ultimately led to crises in various countries. Spain became one of the countries in Europe affected by the crisis.

Certainly the country that won the World Cup in 2010 is constantly trying to increase the revenue earned by the country, given the unreliable export as the main income sector of the country, and the number of tourists who come also decreased after the crisis.

How it can be done is to increase revenue earned through taxes, and this has led to the Spanish prosecutor's office continuing to work with the country's finance ministry to increase tax revenues.

This has an influence on football players in Spain, especially foreign players who have high incomes. Therefore, the players who defend Barcelona and Real Madrid are more vulnerable to tax evasion case because the income earned by players from both clubs is much different than the other 18 teams.

So far Cristiano Ronaldo, Angel Di Maria, Lionel Messi, Neymar, and Javier Mascherano, became the names of players from both clubs (or have defended one of the two clubs) who had been hit by tax evasion allegations.

Authorities generally try to track earnings from outside the soccer activities that the stars gain, such as money earned from advertising activities involving clubs, or in private.

2. The rise of Offshore Company Use

Tax evasion from various countries who crowded uncovered thanks to the investigation of various journalists from various parts of the world that produces documents Papers Panama caused so much talk of entrepreneurs who distribute earnings to entities owned businesses located in other countries.

This is known as offshore company usage. Offshore company means a business entity established outside the country where the individual or company earns revenue, generally the enterprise is used to distribute income, with various purposes.

Channeling income to tax-laid countries is not something new, not least for soccer players who earn high earnings, starting from salaries at the club, until the image rights agreement through various promotional activities.

Indeed, the use of an offshore company is not something that is illegal, businesses like these are often used by investors who are trying to channel capital into other companies.

However, in recent years this has been controversial along with the economic downturn in various countries, and the emergence of the argument that every citizen or resident in a country must pay off the entire tax to be deducted from his income.

Related to the use of offshore company, players suspected of tax evasion are Real Madrid star, Cristiano Ronaldo. The former Manchester United player was accused of funneling income which he obtained from the use of image rights and promotional activities to enterprises located in the Virgin Islands, which are then distributed back to the company in Ireland.

1. Removal of Beckham Law

David Beckham's arrival to Spain from Manchester United to join Real Madrid became a golden age of the country's economy. In addition to the balance between the teams in La Liga, various foreign players and businessmen came to Spain during that period.

The positive economic situation in Spain at the time led to the local government issuing regulations that made it easy for migrants by giving them the option of being taxed as Spanish citizens or foreign residents.

Choosing to be taxed as a foreign resident means that the individual or business entity shall be taxable only on income derived in Spain, and shall not apply to income derived from other countries.

For foreign soccer players, this rule has a significant influence if they often earn income from other countries, and this situation is valid for six years of tax period.

However, this rule does not apply at the end of 2009, and starting from January 1, 2010, any foreigners who come to Spain will not benefit. The abolition of this rule has had a significant impact on foreign footballers with high incomes, as evidenced by tax evasion cases experienced by several star players such as Cristiano Ronaldo, Javier Mascherano, Neymar, Angel di Maria and Lionel Messi in recent years.

So far Cristiano Ronaldo, Lionel Messi, Neymar, Javier Mascherano, Angel Di Maria, and Jose Mourinho became a figure who had been exposed to allegations of tax evasion.

Understanding Spanish economic conditions that require revenue is important, but this should also be anticipated by the club concerned and La Liga as a whole.

This situation can make it difficult for La Liga to improve their image in other countries, and also to bring in high-earning star players in the future.