Brazilian national team coach Carlo Ancelotti has been sentenced to one year in prison for tax fraud in Spain relating to accounts from 2014, which covers the period of the Italian's first spell at Real Madrid. The decision was made at a hearing in the capital Madrid on Wednesday.
The sentence, however, is unlikely to result in Ancelotti being sent to prison. This is because Spanish law stipulates that any sentence of less than two years for a non-violent crime rarely requires the defendant to serve a prison sentence if it is a first offence.
Ancelotti joins list of figures with tax problems in Spain
Ancelotti was accused by the Spanish Public Prosecutor's Office of not paying just over one million euros in taxes in 2014, which were allegedly for image rights.
Despite avoiding prison, the coach must pay a fine of more than 386,000 euros (R$2.4 million) to the country's Federal Revenue Service and is not entitled to receive public aid or subsidies or benefit from tax or social security incentives for three years, according to local media.
The Italian requested the application of "mitigating compensatory circumstances" for having paid off the debt in December 2021. He also had a case tried regarding just over 675 thousand euros that were allegedly evaded in 2015, but was acquitted in this case.
Ancelotti pleaded not guilty to both charges when testifying in April of this year. At the time, the prosecution was asking for a sentence of four years and nine months and a fine of 3.2 million euros, according to BBC Sport.
"For me, everything was in order. I thought it was quite normal because, at that time, all the players and the previous coach did (the same), " he said in court.
In fact, the national team coach is just another member of the list of figures with tax problems in Spain. What most of the cases have in common is that they're related to image rights.
It turns out that Spanish legislation applies specific taxes to this portion, and any discrepancies in declarations to the IRS can cause tax problems.
What some athletes and celebrities do to avoid paying fees is to open companies in other countries and transfer the amount related to their image to these organisations.
Many players and coaches advertise in various locations around the world, meaning their image isn't tied solely to the club they play for in Spain. The problem here is that the European country's legislation doesn't yet provide for a fixed percentage to be paid for image rights simply because the athlete or coach is associated with Spanish football.
Messi, Ronaldo have previously had tax issues
Lionel Messi was fined €252,000 and sentenced to 15 months in prison in 2017, accused of hiding €4.1 million with his father, Jorge, between 2007 and 2009. The amount refers to income from image rights from his time at Barcelona and was allegedly sent to tax havens.
Coach Jose Mourinho was sentenced to one year in prison and ordered to pay €182,000 plus a €2 million fine to the Spanish courts in 2018. He was accused of concealing €3.3 million of his image rights, relating to his time as Real Madrid coach between 2011 and 2012.
In 2019, Cristiano Ronaldo found himself at the centre of a similar accusation. The Portuguese player agreed to pay a fine of €18.8 million and was sentenced to 23 months in prison for alleged tax evasion in Spain between 2010 and 2014, when he played for Real Madrid. The case also involved image rights payments.
Other well-known names in football who faced tax problems in Spain were Luis Figo, Marcelo, Samuel Eto'o, Luka Modric, Javier Mascherano, Xabi Alonso, Diego Costa and Fabio Coentrao.
Brazilian Neymar also had problems with Spanish authorities, but the allegation was that the star and eight other people involved in his transfer from Santos to Barcelona in 2013 had committed fraud and corruption. One of the companies that owned the player's rights, DIS, claimed not to have received the amount owed in the transaction. The charges were dropped in 2023.