Real Madrid head coach Carlo Ancelotti, the most successful manager in Champions League history, appeared in court in Madrid, Spain, on Wednesday over his alleged involvement in tax fraud.
Ancelotti was charged in 2020 after being accused of failing to pay roughly €1million ($1.08m; £830,000 at current rates) in taxes, with the Spanish Public Prosecutor’s Office seeking a prison sentence of four years and nine months and a fine of €3.2m ($3.46m; £2.7m).
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The charges are in relation to Ancelotti’s earned image rights during his first spell as Madrid manager in 2014 and 2015. Ancelotti is currently in his second stint as Madrid boss, having been re-appointed in 2021.
Despite declaring himself as a tax resident in Spain and listing his domicile as Madrid, he allegedly failed to include income from image rights in his tax returns.
It was clarified in court that Ancelotti has paid the €1.5m debt to the Spanish tax authorities.
The 65-year-old appeared in the 30th Criminal Court of the Provincial Court of Madrid on Wednesday, less than 12 hours after being on the touchline for his side’s dramatic Copa del Rey semi-final victory over Real Sociedad, in which Madrid progressed to the final after winning 5-4 on aggregate.
“I have never thought of committing fraud,” Ancelotti, dressed in a black suit, testified to the court after saying that he would not attempt to make a pact with the prosecutors. “I have never had a company for image rights except for these two years.”
Ancelotti’s defence is that it was Madrid’s obligation to make the correct withholding for the tax authorities when it came to income from his image rights, and he said that he “never” intended to defraud.
Ancelotti appeared in court in Madrid on Wednesday (Thomas Coex/AFP via Getty Images)
Ancelotti insisted he had “not received one euro more than what was negotiated” and added that it was Madrid who suggested the structure of 85 per cent of his image rights going to the club, with the Italian receiving the remaining 15 per cent.
The Italian said he negotiated directly with Real Madrid a contract of €6m (£5.1m) net annually over three years. “I negotiate in net (salary) because I am not an expert,” the head coach said.
“I thought it was quite normal because at that time all the players and the previous coach (Jose Mourinho) had (done the same),” he said. “For coaches (image rights) don’t mean the same as they do for players because they don’t sell shirts.”
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“I have never given importance to image rights,” he told the court. “I only cared about collecting a net six (salary of €6m net annually).”
When the prosecution reminded him that his 2015 tax declaration listed him as a Madrid resident in 2016, when he was already coaching Bayern Munich in Germany, he said: “It’s clear that the (tax) declaration is made for me, sometimes I haven’t seen it.
“It’s obvious that it’s wrong (drafted by the advisers) because everyone knows I was in Munich (coaching Bayern in 2016).”
Ancelotti’s defence has called a private expert who has argued that the Italian only spent 155 days in Madrid in 2015, less than the 183-day annual threshold for becoming a tax resident in Spain.
Following Ancelotti’s testimony, his stepdaughter Chloe McKay, his son Davide and his wife Marien Barrena all testified on his behalf.
Ancelotti left the court on Wednesday by saying that he thought it had gone “very well”.
Multiple high-profile figures in Spanish football have been charged with tax evasion including former Barcelona star Lionel Messi, former Madrid great Cristiano Ronaldo and Madrid’s former head coach Mourinho.
Ancelotti’s coaching career has spanned three decades, with 31 trophy victories including five Champions League titles. Alongside his two spells at Madrid, he has managed a multitude of clubs including Parma, Juventus, Milan, Chelsea, Paris Saint-Germain, Bayern Munich and Everton.
(Top photo: Thomas Coex/AFP via Getty Images)
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