Messi and 4m in potential tax fraud
Barcelona footballer Lionel Messi is being investigated by the Spanish authorities for tax evasion.
Messi, arguably one of the best footballers in the history of the sport, is accused, along with his father Jorge Horacio, of defrauding Spain of more than €4m (£3.4m).
As his Barcelona net salary is said to be some 16m euros a year , 4 m euros is a relatively small amount in some ways to Messi but the potential damage to his image is massive.
Obviously I’m not privy to what Messi has done but it seems as though he has attempted to earn his money in a tax efficient manner. There was a time when this would be called clever tax planning, today Govt’s are trying to claw this money back calling it tax evasion. The world is changing and tax advice in many cases needs to re thought out.
As I’ve said in the past, if the rules have been broken then payment must be made. But if the government are merely trying to negotiate with Messi to gain more money it’s totally wrong.
Governments seem to say, come to our country it’s tax efficient. Then a few years later try to find ways of taxing those for they’ve encouraged to their shores.
I suspect we will see a negotiated settlement in 12 months time. Messi won’t dare fight in court even if he thinks he is right and the Spanish Government gain a few million extra in tax. In the meantime, Messi is high profile enough to make think everyone think twice about avoiding tax, legally or not.
Nigel Green deVere Group
Blog written 13th June