Esteemed football manager Carlo Ancelotti, currently directing the Brazilian national team, has navigated a legal challenge in Spain stemming from his initial tenure at Real Madrid. A Spanish court has recently issued a sentence concerning tax obligations from the 2014 fiscal year.
The core of the matter revolves around the non-declaration of income derived from image rights during that period. For this oversight, Ancelotti has been handed a one-year prison sentence along with a fine amounting to €386,361.
It`s worth noting the context: this tax period aligns with Ancelotti`s first spell managing the illustrious Real Madrid squad. His second stint, which began in 2021, was not the subject of this particular investigation.
The legal proceedings unfolded earlier this month in the 30th Criminal Court of Madrid. A key point clarified during the trial was that the outstanding tax liability has, in fact, been settled since the issue arose. Ancelotti`s defense presented the argument that the primary responsibility for correctly withholding taxes on such income lay with the club, Real Madrid, and asserted that there was never an intention to defraud the Spanish tax authorities.
Interestingly, the case did not extend to the 2015 fiscal year. The court determined there was insufficient evidence to prove Ancelotti resided in Spain long enough during that year to incur tax obligations, a consequence of his departure for London following his dismissal from Real Madrid.
While a prison sentence has been delivered, it is widely understood that Ancelotti is highly unlikely to serve any time incarcerated. This is a common outcome in Spain for individuals receiving sentences of under two years for non-violent offenses, particularly when they are first-time offenders and the debt has been paid. This provides a stark contrast to the initial stance of the Spanish Prosecutor`s office, which had reportedly sought a sentence of four years and nine months and a fine of €3.2 million – a rather ambitious figure compared to the final ruling.
Ancelotti joins a list of prominent football figures who have faced similar tax challenges in Spain concerning image rights, including global superstars like Lionel Messi and Cristiano Ronaldo, highlighting a recurring point of legal contention for high-earning expatriates in the country.
Despite this legal entanglement, Ancelotti`s legacy at Real Madrid remains defined by considerable success, including securing three UEFA Champions League titles across his two periods at the helm. This tax case, while significant legally, appears poised to conclude without impacting his freedom, focusing instead on the financial resolution of the outstanding debt.
