Why footballers need better tax planning

Why footballers need better tax planning

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Being a professional footballer these days is among the world’s best paid professions with, particularly those playing in Europe’s best leagues, earning millions every year.

In Forbes’ 2014 World’s Highest-Paid Athletes there were 15 footballers, all playing in Europe – Spain, France, England and Germany to be exact – that made the list. Real Madrid’s Cristiano Ronaldo ranked second overall taking home $80 million in salary and endorsements, while Barcelona’s Lionel Messi ranked fourth pocketing $64.7 million.

See Infographic “The World’s Top 10 Highest-Paid Soccer Players”

Infographic top highest-paid soccer players preview

Messi is currently facing tax evasion charges as Spanish tax authorities are arguing that image right payments meant for the player were instead funnelled into offshore tax havens. The loss to Spain is €4.1 million in taxes between 2007 and 2009.

The Spanish prosecutor alleges that money was routed through UK and Swiss companies and then to companies in Uruguay and Belize. The reason? To make it opaque. Messi denies the allegations, but is understandably saying that his former agent did the deals without his knowledge.

“I am relaxed and distance myself from all that. My father and I have advisors who handle these things for us, and we trust them,” Messi told press soon after the news broke. “I hope it gets sorted out. I don’t understand any of it and that’s why we have lawyers.”

All of this comes at a time when secrecy itself is under attack. The UK is moving to make company ownership entirely transparent. If current proposals pass into law, that may be replicated elsewhere.

Since this news came out just under two years ago, Messi has reportedly paid €5 million to the authorities, to cover money owed from the 2007 to 2009 period, plus interest. He is also believed to have paid €10 million in taxes due on such income for the years 2010 and 2011.


In another recent tax incident, again involving Messi’s club, Barcelona president Josep Maria Bartomeu and predecessor Sandro Rossell stand accused of tax evasion over Brazilian superstar Neymar’s arrival from Brazilian club Santos.

Neymar joined the Catalans from Santos in 2013 for a fee that was initially claimed to be €57.1 million— but it subsequently emerged that the true cost of the deal was closer to €86 million, prompting the Spanish tax authorities to get involved.

Rossell resigned as president to concentrate on fighting the allegations of tax evasion, while current incumbent Bartomeu has also maintained his innocence.

Prosecutor Jose Perals Calleja has now called for Rosell to be jailed for seven years and three months, for two counts of crime against the public treasury — in 2011 and 2013 — and one of corporate crime, while he also demanded that Bartomeu be imprisoned for two years and three months.

Furthermore, the authorities want Barça to pay a fine of €22.2 million and all three parties — the club, Rossell and Bartomeu — to cough up an additional €11.5 million.

Recent reports have suggested that Neymar is set to be called as a witness along with seven other people in the investigation.

In Messi’s and Neymar’s cases it continues to show that with huge financial amounts involved – covering a seemingly endless list that involves fees, clauses, endorsements, bonuses etc within any such deal, footballers need to surround themselves with accredited and proven tax advisors from the very beginning of their careers.

Soccer Scheme

This is no more evident than in the UK where more than 100 footballers, including recently retired Premier League players, are in severe financial difficulties and even face bankruptcy, due to demands from Her Majesty’s Revenue and Customs (HMRC) for repayment of huge disputed tax reliefs. Some players who earned six-figure and million-pound-plus salaries during good careers in English football’s current boom time face losing everything.

These players are understood to have sought help from the players’ union, the Professional Footballers’ Association. Xpro, the welfare organisation for former players, is representing 40 more, according to its chief executive, Geoff Scott. He said all 40 are seriously affected by HMRC demands for the repayment of tax reliefs granted on various investment schemes, with around 20 facing potential bankruptcy and some even homelessness.

Scott said the players signed up to the schemes, which gave them large reductions in tax bills, because financial advisers targeted high-earning footballers and it became a culture within the game.

Footballers, more than ever, need to become more aware when it comes to taxing their profession… and fast!


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