A Spanish court on Wednesday handed down a one-year prison sentence to former Real Madrid coach Carlo Ancelotti for tax fraud from 2014, a punishment that does not require the Brazil national team manager to serve time behind bars.
Prosecutors accused the Italian of establishing a network of shell companies to conceal additional income during his initial tenure as the manager of Real Madrid between 2014 and 2015, particularly through image rights.
They claimed that the 66-year-old, renowned as one of the most accomplished managers in football history, neglected to pay over one million euros in taxes due to unreported earnings during those years, initially seeking a sentence of four years and nine months in prison for him.
During his highly publicised trial in April, Ancelotti claimed that he did not consciously commit fraud, saying he was unaware that a plan enabling him to receive part of his salary through image rights would result in a lower tax obligation.
A court in Madrid revealed that it had found Ancelotti guilty of “an offence against the treasury… resulting in a one-year prison sentence,” along with a fine of € 386,361 ($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.
However, the ex-coach of Chelsea, Bayern Munich, and Paris Saint-Germain, who no longer resides in Spain, will not face jail time as the sentence is under two years and he has no prior criminal history.
The court dismissed the fraud charge for the 2015 tax year, stating it could not determine “beyond reasonable doubt” that his tax residence was in Spain for that period.
He joins a roster of football legends who have run afoul of Spain’s efforts to address the issue of stars failing to pay their taxes.
Ex-Real Madrid coach Jose Mourinho received a one-year suspended sentence after admitting guilt regarding tax fraud in 2019. Both Lionel Messi and Cristiano Ronaldo were found guilty of tax evasion and received suspended prison terms due to being first-time offenders.
Ancelotti’s illustrious career has included winning a record five Champions League titles as a manager and securing the European Cup twice as a player with AC Milan.
The former Italy midfielder left Real Madrid to take on the Brazil head coaching role after last season, after a rare campaign without silverware.
