Sport

Luka Modrić to Face Madrid Court in Early 2019 for Tax Fraud

By 31 December 2018

Captain of Croatia national team Luka Modrić could face a judge in Madrid at the beginning of 2019, who will decide on his settlement with the Spanish tax administration, reports HRT on December 30, 2018. 

Modrić, the 33-year-old Real Madrid midfielder and Ballon d’Or winner, has accepted a tax fraud charge of 870,728, euro and has agreed to pay 1.4 million euro for penalties and interest.

“We will solve the case of Cristiano Ronaldo first, and then there will be a hearing for Modrić, possibly early in the year. We still do not have the exact date,” court spokesperson Luis Salas said in a telephone conversation. Modrić will have to make a statement personally, as he lives here, Salas added.

Ronaldo, despite his initial claim to be innocent, has decided to settle with the tax administration and state attorney's office and pay 19 million euro in unpaid taxes, interest, and penalties. He is charged with having deliberately evaded taxes in Spain from 2011 2014 and owes 14.7 million in income tax from sponsorship contracts by opening up companies in foreign tax havens.

Ronaldo was declared the best footballer of the world in 2017. This year, the Ballon d’Or for the best in the world was given to Luka Modrić.

The Spanish State Attorney's Office charged Modrić and his wife Vanja in 2017 for tax fraud of 870,728 euro. They opened the company Ivano S.a.r.l in Luxembourg where Modrić received money from sponsorship contracts in 2013 and 2014.

The investigation began in 2016 when taxpayers noticed that their tax returns for these two years had no income derived from sponsorship contracts. He stated on the property card that he owned the company Ivano S.a.r.l., named after his son, with Vanja as the manager. 

Opening a company in Luxembourg for the management of Modrić's image is in accordance with the law, and he can receive financial gain through it if it is engaged in that activity. Activities include promotional events, commercials, videos, interviews, and so on, and a contract that allows Modrić to leave his rights to the company in exchange for financial compensation.

The tax police reviewed the company Ivano S.a.r.l. and found that the company did not deal with the management of Luka Modrić’s image, that he had no employees and equipment, and that he used the company as a footballer avoiding taxes in Spain. Investigators have concluded that in Luxembourg, which has low taxes, there is nothing but a registered company at the address. The account showed that he was paid money from Nike, and other sponsors and marketing contracts he had with Real Madrid. 

According to Modrić’s contract and his company Ivano S.a.r.l., that money would be withdrawn after completing his football career.

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