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Alexis’ time at Barcelona catches up with him as he is accused of tax fraud.

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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From the Arsenal History Society  

You can find an index to all the series to date on the Society’s web site.

 

 

8 comments to Alexis’ time at Barcelona catches up with him as he is accused of tax fraud.

  • SamuelAkinsolaAdebosin

    I hope this alleged tax fraud saga that implicates Alexis will not lead to him losing his focus in his game.

    No smoke can smoke without fire beneath it. We’ve not known the Spanish tax authorities not getting it right when it comes to tax fraud indictment.

    Nevertheless, I am encouraging Alexis not to allow this tax fraud allegation gets the better hold of him. Rather, he should get the better hold of the allegation by not allow it to creep into his game and affect it. Because as a human being, this allegation that has gone public will impact negatively on his thoughts and he will feel emotionally. And this could constitute a problem in game.

    Arsenal need the on the field exploits of Sanchez. Moreso at this stage in the season when the heat to win the EPL title and others is building up. Sanchez MUST focus totally on his game for Arsenal and leave the tax matter to his Solicitors & Anthony to handle the case on his behalf. And am sure if he has a good Anthony, he will fight to get him a good judgement in the court should the case reached there.

  • Gunnerjoe

    You know of course that Alexis is not a Barcelona player anymore so there’d be no suspension of he’s jail sentence.

  • Robert

    Much of the Spanish press is in bed with Barcelona or Real Madrid, and is as reliable as our gutter press.

    I’ve yet to see an official statement from the Spanish tax authorities, so I’ll reserve judgement for now.

    Besides, I do wonder about the timing considering Alexis’ contract is up for renewal at the moment.

  • SamuelAkinsolaAdebosin

    @Gunnerjoe.
    I am not a lawyer and I have no knowledge of international or regional law. But the UK still being a member of the EU until it ceases to be, would Sanchez then not still be answerable to the Spanish court at least to make him pay his tax which he has evaded while playing at Barcelona? But this time not to ban or jail him since he’s no longer a footballer trading his trade on the Spanish soil.

  • GoingGoingGooner

    Ultimately it is the player’s responsibility to make the correct moral and legal decision and each player PROBABLY had a different accountant/tax lawyer but you’d think by now that Barcelona would be warning/advising their players to stay away from certain people to avoid such shenanigans. Of course, the opposite could be true and they are appealing to the players’ base instincts by setting them up with these people in order to convince players that they can make even more money by signing with them.

  • WalterBroeckx

    GoingGoingGooner, agree with you. It is in the end the decision of each individual to follow the law completely or not. And certainly when $$$$$ and ££££££ (and lots of them) are involved the bad side of human nature comes above water.
    But when you have a main factor each time…. you might come to the conclusion that it is that main factor (Barcelona) that is the cause of the problem. But still every player has to make up his mind if he would follow that “advice” or not.
    I would hate to see the name Arsenal come up with a few of such cases.

  • Notoverthehill

    Walter

    Arsenal set up a business which could be used as a mechanism to pay its players bonuses without incurring high-rate income tax and national insurance.

    In June 2001, Sevco 1270 was set-up as a private unlimited company, into which bonuses could be paid.

    The House of Lords shot the scheme down, and the Arsenal accounts show £11 millions were provided to cover the taxes avoided, NOT evaded!

    Curiously enough, those who bought the entrails of Glasgow Rangers FC, set up a company also called Sevco!

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