Arsenal News
Arsenal News & Transfers
As featured on NewsNow: Arsenal newsArsenal News 24/7

Arsenal News, Only Arsenal, Blogs, Transfer News

Archives

May 2017
M T W T F S S
« Apr    
1234567
891011121314
15161718192021
22232425262728
293031  

What exactly is the finance scandal surrounding Mourinho and C Ronaldo?

By Tony Attwood

The English papers (other than the Sunday Times) are making little of the financial scandal that erupted across Europe yesterday – perhaps because they were not part of the group that put the research together, perhaps because in their superior manner they think their readers won’t be able to follow the details.

So in the interest of clarity here’s one way in which the tax scams that increasing numbers of football people seem to enjoy.

Imagine for a moment I am a very successful writer, earning lots of money from the books I write.  (Preposterous of course, but just set reality aside for a moment).

I sell the rights to all the income from my future books to a company based in Panama, or the British Virgin Islands or some such place.  Since the ownership and workings of such companies are always kept secret no one knows that by a strange coincidence I also have a deal with that company which says that once fees have been paid to the local people who by law have to be on the board, the rest of the money is mine.

So money pours into that account and no tax is paid.

I then decide to take a holiday in the Virgin Islands (for example) and one day saunter into the bank which holds the account for the company I’ve set up, and ask them to pay me $Lots in cash.  There’s no problem since the currency of the territory is US dollars and the money is mine.  I now have lots of cash, and so toddle over to a local estate agent and get him to buy me a big house using my cash.  Now I have a house paid for with earnings which have had no tax paid on them.

So it goes on, and on and on.  Quite often the big earners don’t do any of these actions themselves but allow their agents to handle all the details.  They just end up with properties, business and loads of dollars, all without paying tax. In the example above I could also set up arrangements so that all my bills are paid for by a business linked to a business linked to my Virgin Islands account.  Still without paying tax.

Why do the British allow it?  Well, if you look at the Panama Papers it is probably because a lot of the families of politicians utilise it.  But that perhaps is another story which also might be why the papers in Britain don’t really cover the issue much.   (Or perhaps they think we are just not interested in the notion that Mourinho has been very active indeed in avoiding the sort of taxation that the people who support his teams pay as a matter of course).

But fortunately we can read the European papers, and Le Temps in Switzerland has given us what the British media refuse to offer.

Back in May Spanish media reported that Mourinho was fined nearly £800,000 over alleged irregularities in his tax returns with payments being made of  around £1.6 million, including the fine and unpaid tax.   Of course with an income of £13m a year he could afford it and it was interesting to note that he did not appeal the fine in a case that centred on that old favourite tax dodge, image right earnings from brands like Adidas, Jaguar and American Express during his time at Real Madrid.  (Image rights like royalties can accrue in multiple countries and so can be subject to a tax scam).

But let us be clear in saying there is no suggestion in the reports he deliberately committed any wrongdoing.

In October 2015 he was accused of avoiding paying £24,000 stamp duty on a home he bought in Setubal, Portugal in 2008.  It is suggested (and of course I don’t have the resources to validate such a claim, I can only put together the bits and pieces from various newspapers that are willing to follow the story) that he had paid £1.1 million for the property.   But in a separate court case centring on corruption in Portugal it emerged he paid around £350,000 more, saving himself £24,000 in stamp duty.

The Portuguese Expresso magazine said the undeclared funds were paid into a Swiss bank account not controlled by Mr Mourinho.

Meanwhile it is said that Christiano Ronaldo concealed more than 160 million Swiss francs (around £150m) of earnings by putting in place an opaque system of monetary movements set up by (it is alleged) Jorge Mendes to hide CR7’s  income from sponsorship. 

It is also said that José Mourinho has been using the same system which operates via the Mirabaud Bank in Geneva, where Cristiano Ronaldo hid 74.7 million euros (£70m).  As a result of the financial movements a tax rate of around 4% has been paid.

The source of the money in the Ronaldo case is sponsorship income. Each Nike football shoe stamped “CR7” earns him 13 euros.  Not bad if you can get it.

Other Ronaldo sponsors are equally generous. For 6 hours 45 minutes of filming a commercial for Toyota in 2013, Ronaldo received $1.9 million. An advertisement in China for a Honda brought him in 2 million euros for what Le Temps a little sarcastically called “six hours of “work”.”

And then there is a screen of companies registered in the secretive British Virgin Islands combined with the Spanish “Lex Beckham”, law that ensures tax advantages for certain foreigners by not taxing the marketing receipts gathered abroad – including of course “image rights.”  Hence a tax rate of 4%.  

But that notorious Lex Beckham ended on 1 January 2015 and so it is said that Ronaldo liquidated the British Virgin Islands account (which had a throughput of 75m euros over the previous five years) and resold the rights to the images of the player for the next five years to a close friend of Jorge Mendes – Peter Lim, thus keeping the low tax rate going.

So for €74.7 million, Peter Lim bought the image rights of Cristiano until 2020, via two companies in… guess where…  the British Virgin Islands. The money went into Ronaldo’s account at the Mirabaud Bank in Geneva.  As a result of that Ronaldo got five years of future income and paid €2.7 million tax instead of €33.6 million which would have been paid if the income had been paid between 2015 and 2020.  

Of course as we’ve reported from time to time other players who have played in Spain have been held accountable to the courts for similar creative ways of not paying tax including Samuel Eto’o and Lionel Messi. And now it is alleged (but denied) that Jose Morinho has received a €4.4m for the same type of arrangements as used by “CR7”.

There are calls in the UK for an investigation into Mourinho’s financial affairs.  Quite how this will play out we don’t yet know since there are 18 million documents in the case and a lot of trawling to be done.  But as with the Panama Papers there is going to be a lot of blocking of details by people who are a little worried about how much of their affairs might become public.

But there are suggestions in the Sunday Times that it has evidence suggesting tax officials in Britain and Spain having been misled by Mourinho and his “advisers” in an earlier investigation.  The British MP Meg Hillier, who is chair of the powerful public accounts committee, said: “These revelations are extraordinary and warrant a close examination by the UK tax authorities.”

In Spain Julián López Milla, a member of  the Spanish parliament’s taxation committee asked for the case into Mourinho’s taxes in Spain to be reopened to “investigate whether Mourinho has committed the criminal offence of tax fraud”.

Gestifute, the company founded by Jorge Mendes, said, the allegations were “serious and malicious” and added,“Both Cristiano Ronaldo and Jose Mourinho are fully compliant with their tax obligations with the Spanish and British tax authorities. Neither Cristiano Ronaldo nor Jose Mourinho have ever been involved in legal proceedings regarding the commission of a tax offence.

“Any insinuation or accusation made to Cristiano Ronaldo or Jose Mourinho over the commission of a tax offence will be reported to the legal authorities and prosecuted.”  I make no insinuation or accusation – I am merely noting that these stories are appearing in papers overseas, even if not in the UK.

The European Investigative Collaborations consortium, which worked with Der Spiegel, to which the information was originally passed from Football Leaks, said the documents on which the accusations were made included photographs, spreadsheets and emails.

And this might not be all because it has said that there is more to come offering, “an unprecedented look into the gloomy depths of the modern football industry”.

We await with interest.

Tales from Untold 

Wenger ponders whether Yaya Sanogo will ever really be good enough for Arsenal. 

State Aid United – Arsenal 1-5: Oh what a birthday gift

WHU v Arsenal. The teams, the tactics, the injuries, the cost.

State Aid United v Arsenal: no Jenkinson, no Santi, and the problem of moving home

When the press start saying Arsenal will win honours it is time to start worrying

West Ham v Arsenal Saturday 3 December 2016 – The Match Officials

Three times as many arrests at Arsenal as at State Aid Utd? Up to a point Ms Copper

Santi Cazorla out for three months. Now what?

 

22 comments to What exactly is the finance scandal surrounding Mourinho and C Ronaldo?

  • SamuelAkinsolaAdebosin

    OT.
    I’ll read the article posting later. Incredible stuff at the Vitality. The introduction of Arsenal graduate, Benik Afobe into the game who missed scoring the 4th for the Cherries has brought urgency into Bournemouth game. Can the Cherries hold it to end for us to remain in 2nd? I pray so. I am shivering as I am typing.

  • SamuelAkinsolaAdebosin

    Afobe missed and Origi has just missed. So no problem. The important thing is Liverpool don’t score again. But I don’t mind if Bournemouth does and they’ve incredibly done so as I am typing. Juggen Klopp is looking cold.

  • SamuelAkinsolaAdebosin

    Official: Arsenal remain 2nd. And champagne night at Bournemouth? That’s according to the commentator on my TV. One thing I’ve seen and learn in this game is Liverpool with their arrogant high pressing game can get tired as the game wore on if the opposition team keeps pressing them. Arsenal should take note of this Reds weakness when we go to Anfield later in the season in the PL or play in the FA Cup.

  • MickHazel

    Absolutely terrible off the ground two footed lunge by Man U’s Marcos Rojo against Everton, cast iron straight red card but ref Oliver deems it only a yellow card. Unbelievable.
    Has Sir Alex had words with Riley and reminded him of his responsibilities?

  • Robido

    Benik got a good reception when he came on at the Ems. Thankfully he couldn’t concert his chances. I like Samuel thought it was done and dusted at half time. Bournemouth keeper – utter borrocks – cost them and lpool looked in control with Jack last seen sat on the grass. I went out shopping. What a result. I’ll have to ask my lpool pubmate what happened.

    Got home just in time to see rojo get sent off …..oh it’s man U and Mr “how will he explain that one? ” Oliver….didn’t happen. Not saying everton would therefore win but it would be less likely.

    Nice to see moronio glowering in his seat – until they got given a goal. Off to the pub now to see if it has the same effect as with lpool.

  • Robido

    …converted…more likely…. Ned a new prove reader.

  • SamuelAkinsolaAdebosin

    Hmmn, this is intriguing and a bit difficult to absolved or condemned those who have been indicted for tax payments fraud before and now by the Spanish tax hierarchies.

    I think those indicted footballers and football clubs managers who have earned big money or are earning big money at the 2 big Spanish clubs of, Barca and R Madrid are the ones mostly involved in allegations of tax payments evasion payable to the Spanish tax authorities. By the way, do they pay their taxes on the, pay as you earn (PAYE) basis? Just like the federal govt of Nigeria employees have been and are still paying their taxes at the rate of 5% of their basic salaries. Allowances such for, housing, transport, medical, utilities and others are tax free.

    Why has this tax evasion by the top football earners in Spain taken place in the 1st place and doesn’t look it will voluntarily stopped soon? Are the tax payable by those top football earners to the Spanish tax office considered too high to pay by the payers? Moreover, this outrageous tax charges charged to top professional football earners are unheard off in the other top professional football League countries of Europe save Spain.

    To lessing this tax evasion in Spain by top professional footballers and managers in the top Spanish League clubs in particular at Real Madrid and Barcelona FC, I will advise the Spanish tax authorities to strike a balance in tax payments acceptable to both parties.

    In view of this unending tax payments fraud indicting present and former top football earners in the Spanish 2 big clubs of, Barca & RM , if his hands are not clean, I think our Mesut Ozil, a former top earner at Real Madrid should think twice on his going back to Real Madrid if reports in the media purporting that he said, he’s not ruling out going back there is to be believed.

  • MickHazel

    Now Zlatan Ibrahimovic stamps on Colemans head and Oliver gives a free kick but not even a yellow card let alone red.
    The current quality of refereeing is an absolute joke.

  • Al

    Yes, Oliver’s tilting the pitch in this match. When are people going to say this has gone too far?

  • Al

    Part of me thinks the UK papers aren’t reporting on this because of the man Utd link? Might seem far fetched but strange things go on here that leads one to think that way.

  • SamuelAkinsolaAdebosin

    Amassing! Amassing!! and Amassing!!! Manchester United are now conspicuously 10 points behind Arsenal in the table at the close of business today in the Premier League campaign. Wow!

    I think by match day 28 in the PL, Man U will be 20 points behind Arsenal in the table. Another Wow! For us there.

  • Mandy Dodd

    Seems Jose, like the game of football in general is losing its star as murky allegations surface.
    If they are indeed found guilty, and there is agent collusion, hope they throw the book at them, but somehow doubt they will

  • Paul the gooner

    What a awful love in Alan Parry has with Liverpool.I watched it on sky and I know he is a red, but he went way over the top.He must have mentioned 4 times how unlucky Bournemouth were against Arsenal.
    It now seems to be acceptable for teams to play well and loose.That is all you hear from the bent media.It is never is said when Arsenal play well and loose.

  • Al

    My 17:31 post was referring to the UK press not reporting on the mourinho/ronaldo finance scandal. I think the UK press tends to avoid focusing on anything that can put anyone associated with Utd, past or present, in bad light. Anyway I hope the Spanish authorities and whoever else is looking into this throws the book at these two.

  • Pat

    Two enjoyable results today – Liverpool losing and United drawing. I didn’t see either match, but it seems a bit rich Mourinho saying United were by far the better team when Everton had more shots AND more shots on target. Arsenal still second – take that, Shearer!

  • omgarsenal

    Paul the gooner……it is spelt LOSE not LOOSE. Otherwise I agree…..

  • Leon

    Wow!
    The spelling police………

  • marios

    must point as i watched the united game that coleman turned into towards ibrahimovic who could not really be responsible for the subsequent incident

  • para

    I thought we had Santi to look forward to in the new year but it looks like we will have to do without him.

    Still, we are capable even though we had dropped a little in intensity, we are slowly getting it back.

    I was watching the bournemoutn v liverpool game and switched off after pool went ahead 3 goals thinking they had done it. Was i wrong, Bournemouth came back, and on top of that Manu (no threat to us, but still nice to see floundering) drew, leaving us second now.

    Glad we made up some GD. Good to see Alexis name in top scorers list where it belongs.

    That’s the way.

  • Leon

    para
    I switched out at 1-3 thinking it was all over and came back at 3-3.

  • MickHazel

    marios
    You are right to a degree, but the collision was not the problem. The problem was the kick to Colemans head whilst they were on the ground after the collision. It looked pretty deliberate to me and the match commentators.

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>