The tax trick that could see Cristiano Ronaldo join Real Madrid

Rumours have sparked recently over a potential Cristiano Ronaldo return to Real Madrid, but such a deal could prove complicated for Los Blancos taking into account Spain’s high tax rate.

Cristiano has been on the receiving end of criticism lately following Juventus’ elimination at the hands of Porto in the Champions League’s last 16.

“Ronaldo enjoys a special tax regime [in Italy],” explained Toni Roca, CEO of Himnus Football Lawyers.

“He did not go to Italy by chance, since the transalpine country has the most favourable tax treatment of the five major leagues on the continent.”

According to Roca, Italy’s tax authorities receive just 225,000 a year in tax by Cristiano, who earns around 40 million euros per season.

However, this cannot happen in Spain since the famous Beckham Law was scrapped back in 2016, with the country’s tax rate being much higher than Italy’s.

“For those 40 million euros that [Ronaldo] receives per year for image rights, Cristiano would have paid 100 times more taxes in Spain,” adds Roca.

“This means [an increase] from those 225,000 euros that he now pays in Italy to a whopping 20 million euros a year in our country, and that’s without counting the salary.”

The only way Cristiano would avoid paying such high taxes in Spain would be in the event he reaches an agreement to sign for Real Madrid on a one-year deal.

“If Cristiano signed for Real Madrid for one season, he would be taxed as a non-resident, he would not pay for image rights [he would save 20 million euros] and he would only pay 19 percent of personal income tax,” argues Roca.

In this event, Cristiano should leave Spain before June 30, 2022, in order to be no longer considered as a Spanish resident. Otherwise, the tax rate would multiply.

“Los Blancos would be affected because, when the player negotiates his salary in net, he would have to take care of the difference of this 30 percent corresponding to the salary of 2022,” explains Roca.

“In the case of Cristiano, he would go from paying taxes only on Spanish income to doing so on all [income] obtained worldwide, which would also include the returns from image rights.”

Similar Articles



Please enter your comment!
Please enter your name here

Most Popular