Lionel Messi Tax Fraud: Is Soccer Star Part Of Spain's Effort to Squeeze Out More Tax Money?

Star FC Barcelona player Lionel Messi was accused by Spanish tax authorities on Wednesday of filing fraudulent tax returns between 2006 and 2009.

The player, using companies based in Belize and Uruguay to hide income from tax authorities, has allegedly evaded more than 4 million euros in tax.

If convicted, Messi and his father Jorge, who was responsible for his finances during this period, face up to six years in prison and fines of 24 million euros.

Messi – ranked as the world’s tenth highest earning athlete – earns a $20 million salary from FC Barcelona as well as $21 million in endorsements from sponsors including Adidas and Pepsi.

While tax prosecutors have already filed a writ against the player, the court is yet to decide whether it will open a case against the World Player of the Year.

Messi – who claims to have only learnt about the allegations through the media – wrote today on his Facebook page:

“We are surprised about those news, because we have never committed any infringement. We have always fulfilled all our tax obligations, following the advices of our Tax Consultants who will take care of clarifying this situation.”

The Argentine-born Messi is not the first soccer player to come under fire for minimizing their tax bill.

Premier League players have been accused of using similar schemes that funnel money abroad, costing the UK Treasury more than 100 million pounds a year.

Taking advantage of their international appeal, many players directed their incomes into foreign-based companies, whose nominal function is to sell the rights to players’ image.

While other stars have created such companies – including England stars Wayne Rooney, Gareth Barry and Theo Walcott – Messi is the first to face possible criminal charges.

This investigation into one of Spain’s biggest sports stars comes amidst a government clamp down on tax fraud, implemented to reduce budget deficits after five years of recession.

While details around allegations remain unreleased, Messi may have fallen foul of Modelo 720, a recent form that demanded all residents have declared their foreign assets by the end of April.

Whether Messi schemes constitute tax evasion – a criminal offence – or simply tax avoidance – the use of legal loopholes – remains uncertain.

Despite condemnations from authorities, tax collectors have never prosecuted players for managing similar schemes in the UK.

Being dredged into the spotlight a full four years after the fact, the Messi allegations may have little to do with punishing fraud and more to do with raising Spanish tax revenues.

By prosecuting Spain’s most recognized sportsman, tax collectors are sending a warning to other high earners that not even the rich and famous are free from their scrutiny.

For more updates follow me on Twitter @alexebennett.