A Spanish court on Wednesday sentenced former Real Madrid manager Carlo Ancelotti to a year in jail for tax fraud committed in 2014, a punishment that will not oblige the Brazil coach to serve prison time.
Prosecutors alleged the Italian created a system of shell companies to hide extra earnings during his first spell as Real Madrid manager in 2014 and 2015, notably through image rights.
They said the 66-year-old, one of the most successful managers in football history, failed to pay more than one million euros due to undeclared earnings in those years, seeking four years and nine months’ jail against him.
Ancelotti denied having intentionally committed fraud at his highly publicised trial in April, saying he never realised a scheme allowing him to collect some of his salary in image rights would see him pay less tax.
A Madrid court announced it had convicted Ancelotti for “an offence against the treasury… to the punishment of one year in prison” and a fine of 386,361 euros ($452,821).
Ancelotti showed a “conscious desire to evade the payment of taxes on the income obtained from the exploitation of his image rights, through artificial mechanisms”, the court wrote in a ruling.
“The actions are blatantly fraudulent and the structures used do not conform to a real economic logic. The deliberate concealment of income through opaque structures and entities in tax havens proves a fraudulent intent,” it added.
But the former Chelsea, Bayern Munich and Paris Saint-Germain boss, who no longer lives in Spain, will not serve jail time because the sentence is less than two years and he has no criminal record.
The court cleared Ancelotti of the fraud allegation for the 2015 tax year, saying it could not conclude “beyond reasonable doubt” that his fiscal residence for that year was in Spain.
He joins a list of football greats who have fallen afoul of Spain’s crackdown on stars who have not paid their due.
Former Real Madrid boss Jose Mourinho received a one-year suspended sentence after pleading guilty to tax fraud in 2019.
Lionel Messi and Cristiano Ronaldo were both found guilty of tax evasion and received prison sentences that were waived for being first-time offenders.
Ancelotti’s glittering career has seen him win a record five Champions League titles as a manager and lift the European Cup twice with AC Milan as a player.
The former Italy midfielder left Real Madrid to become Brazil boss at the end of last season after a rare trophyless campaign.
