Ancelotti Refutes Tax Fraud Claims, Attributes It To Real Madrid’s Payment System

Real Madrid coach Carlo Ancelotti has denied intentionally committing tax fraud on the first day of his trial, where he faces accusations of failing to report income to Spain’s tax authorities.

This case is part of a series of legal actions against prominent sports figures in the country. Prosecutors are seeking a sentence of four years and nine months for the 65-year-old Italian coach, alleging he failed to pay over one million euros ($1.1 million) in taxes by not declaring earnings from image rights during his first tenure at the club in 2014 and 2015.

The prosecution claims that Ancelotti only declared his salary from the club and did not include income derived from image rights in his tax returns for those years.

Prosecutors claim that Ancelotti created a “confusing” and “complex” network of shell companies to conceal his additional earnings from image rights and other sources, including real estate.

In his defense, Ancelotti told the High Court of Justice in Madrid that the payment structure had been suggested by Real Madrid and emphasized that “all the players do it,” citing that even former coach Jose Mourinho had used a similar system.

“When the club suggests it to me, I put Real Madrid in touch with my advisor. I didn’t deal with it because I had never been paid that way,” he said.

“I never realised that something wasn’t right,” he added, saying he “never considered committing fraud”.

Ancelotti arrived at court accompanied by his wife, Mariann Barrena, and their son, Davide, who is an assistant manager at Real Madrid.

The trial is anticipated to last two days, although an out-of-court settlement could be reached at any time during the proceedings.

In previous cases involving footballers, suspended sentences were often handed down, typically following out-of-court agreements.

Ancelotti testified in court that he had never realized that the company he had established to transfer these image rights to him allowed him to pay less tax.

“At that time, all the players and coaches were doing it that way; it seemed like the right thing to do,” he said.