The five-times Ballon d’Or winner – who will be playing against some of his colleagues this evening as Portugal face Spain in the two countries’ first World Cup match in Russia – was accused of ‘evading’ €14.7m in taxes during his early years with Real Madrid, but on appeal, this figure has been reduced to €5.7m.
The additional €13.1m he has agreed to pay is in interest and charges.
Father-of-four Ronaldo is the latest in a string of sports stars, celebrities, artists and even the recently-resigned TV presenter and journalist-turned-minister of culture Màxim Huerta who, placing their financial affairs in the hands of their accountants, have since found out these professionals and the Spanish tax authorities did not coincide in what was considered ‘legal’.
In most of the cases in question, the ‘offenders’ had set up dormant limited companies for invoicing their services or receiving royalties in what was believed to be a legitimate, or at least commonplace and widely-accepted, way of avoiding tax in a non-fraudulent manner.
But in between changing rules, changing views in society and a stiffer crackdown including widespread inspections, this is no longer considered legal and is not a safe method.
Portuguese team captain Ronaldo said the limited company method was above board and completely transparent when he set up the structure whilst playing for Manchester United, and that he simply continued with it, believing it to still be, once he moved to Madrid.
Tax evasion, deliberate or otherwise, is considered a criminal offence once the amount exceeds €120,000, meaning paying one’s dues and the associated interests and fines does not conclude the matter.
In Ronaldo’s case, he has managed to negotiate a prison term of two years – any longer than this has to be served in custody, but a two-year sentence or less does not if it is for a first offence.