Brazil's head coach was sentenced for tax evasion in 2014, when he was Real Madrid's coach. He was also acquitted of another similar charge that occurred in 2015
Carlo Ancelotti, current coach of the Brazil national team, has been sentenced to one year in prison for an offense against the Public Treasury corresponding to the 2014 fiscal year, while he was acquitted of a similar charge related to 2015.
Section 30 of the Provincial Court of Madrid imposed the minimum penalty established by law for the fraud committed in 2014, in addition to a fine of nearly 390,000 euros and disqualification for three years from receiving public aid or subsidies and from benefiting from tax or Social Security incentives.
Before going to trial, Ancelotti deposited 1.4 million euros to cover the debt with the Treasury, the surcharges, and the interest, which is why a portion of that amount will now be returned to him.
The Prosecutor's Office requested four years in prison for the Italian, accusing him of defrauding 1,062,079 euros between 2014 (386,361 euros) and 2015 (675,718 euros), during his first spell as coach of Real Madrid.
Todo ocurrió en su primer ciclo con el Real Madrid
The court found it proven that Ancelotti relied on a network of companies based in the Virgin Islands and London to collect his image rights, of which he assigned 50% to the Merengue club. For that concept, the club paid him 1,409,645 euros in the 2013/2014 season and 1,795,575 euros in each of the following two seasons.
In relation to the 2015 fiscal year, the judges acquitted the coach as it was not proven that he spent more than 183 days in Spain, a requirement to be taxed as a fiscal resident. After being dismissed by Real Madrid in April of that year, he established his official residence in London, although he maintained a home in Madrid.
During the trial, which took place on April 2 and 3 at the Madrid court, Ancelotti stated that he never intended to defraud the Treasury, that he acted following the advice of the club, and his tax advisors, and he requested acquittal. Alternatively, he requested the application of mitigating factors for having repaired the damage in December 2021 and for delays in the process.
Ancelotti aseguró que no quería defraudar a Hacienda
The defense expects to recover a multimillion-euro sum
The court ordered the sentence to be communicated to the Tax Agency so that it could make the necessary corrections regarding the amounts paid by Ancelotti. Sources close to his defense indicated that, in addition to having most of the 1.4 million he paid in 2021 for the 2015 fiscal year returned to him, the ruling confirms that his tax residence that year was in London.
For this reason, they estimate that, instead of being taxed in Spain at 49% on income of around 18 million euros, he should have been taxed at 20%, so the refund from the Treasury could approach 5 million euros.
