By Tony Attwood
There are two things we know about players who have played for Barcelona. One is that they have been in a club that engaged for multiple years in child trafficking. The second is that they employ or have employed a number of players who have been found guilty of tax fraud in Spain.
Plus there are three things we know about Barcelona itself. One is that they deny everything, and have chairpersons who mumble about “one day the whole story will come out” without giving any explanation. The second is that they are either very unlucky in matters relating to the law, or they think they are above the law. The third is that they have a flotilla of newspapers around the world who will print the Barcelona version of every story without any reference to cross-checking (or in some cases, reality).
So buying a player from Barcelona is fraught with difficulty. Not because it is inevitable that the player will have been involved in tax fraud, but rather that the player might have been involved in tax fraud while at Barcelona.
And now, sadly, this appears to be the case with Alexis Sanchez, the latest in a long line of Barcelona men to be accused of “actively withholding” taxes.
The amount in question is €983,443 and the money was allegedly withheld between 2011 until 2014. The story comes from El Periodico a newspaper based in Barcelona which cited the age old problem of image rights money.
Prosecutor Miguel Angel Perez de Gregorio has made the allegation that Alexis Sanchez did not include the income from his image rights in both 2012 and 2013 while at Barcelona, and he is also accused of instead, moving the sales of those rights to a company, based in Malta, called Numidia Trading.
Malta, I should add, being part of the EU, is not a tax haven in the sense that Panama is, or even in the sense that the Channel Islands used to be (the Islands, although British, are outside the EU). Panama has an absolute secrecy over tax affairs, Sark in the CI has no company tax at all), but it does have a low tax level, and a banking industry stability which makes it very attractive to EU residents.
But to try and use Malta to gain low tax and at the same time hide the money is not the smartest move in the book, not least because membership of the EU comes with banking transparency. (Which of course does mean that when the UK leaves the EU the UK could become just like Panama, and become a home to all the banking scams of the world).
So the allegation is that Alexis failed to declare €587,677 in 2012 and a further €395,766 a year later, and crucially did not include details of the Maltese company in his tax declaration.
In short, where Lionel Messi and Javier Mascherano have gone before, now it is said Alexis has also gone, but with more transparency.
Messi junior and Messi senior were found guilty of defrauding Spanish tax authorities of €4.1m earlier this year in relation to tax fraud cases between 2007 and 2009. In an attempt to overcome the situation Messi voluntarily paid arrears of €5.1m in August 2013.
However it didn’t get him off the hook and Messi was given a 21-month suspended prison sentence and ordered to pay €1.7m in fines in May this year.
Mascherano also got a suspended jail sentence of one year. He took the simple route of admitting two counts of tax fraud totalling over €1.5m in relation to his earnings between 2011 and 2012.
Of course we don’t know the details of the Alexis case yet, but if the details are as currently being reported in the Spanish press, then Alexis’ position is somewhat different from the earlier Barcelona cases in which a multiplicity of companies were used deliberately to hide the money.
In this case it seems that the Alexis company was quite openly there, and not meshed within a misleading tangle of fake and dormant companies. If that is the case he will be able to say that he was making use of the variable tax regimes that exist in the EU, and that not declaring this in Spain was an accountancy error rather than a deliberate attempt to defraud the state.
That does not make him innocent, but does reduce the nature of the charge and subsequent penalty.
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