Tax authorities scrutinise Messi’s foundation

Spanish tax authorities are investigating whether payments from FCBarcelona to Lionel Messi’s foundation were used to help the playerevade taxes, Spanish daily El Mundo reported yesterday.The newspaper, which has acquired Football Leaks documents, reportedthat the club gave the foundation “at least 12.7mn euros ($15.5mn)between 2010 and 2016”.The paper said that the payments from Barca represented 71.5 percent of the foundation’s revenue between 2013 and 2016. The foundation says on its website that it “was created in 2007 with thewish that all children should have the same opportunities to make theirdreams come true, and to promote equality in education and health.”Between 2010 and the official registration of the foundation in June2013, the club reduced the corporate tax they paid on the money by 35%,in line with rules on donations to charities.Those payments raised the suspicions of the authorities which, inJanuary 2016, began to investigate whether the money had been“remunerative” and evaded corporate and income tax. In April 2016, taxinvestigators visited the Barcelona offices — not for the first time inrecent years.After the official scrutiny began, the club stopped making thedeductions from their donations and started withholding 45 per cent fortaxes suggesting, the newspaper said, that the payments “were consideredpart of the salary” of the Argentine star.El Mundo said that the club had urged Messi, already being investigatedfor a 4.1 million-euro tax fraud relating to his image rights, to“regularise the donations to his foundation”. In the image rights case,Messi and his father, Jorge, were found guilty in 2016.El Mundo said that, by law, 70% of a charity’s revenue should be spenton the aims for which it was created but a report in another Spanishnewspaper, ABC, found the foundation’s accounts were full of gaps butincluded large sums spent on external consultants, rent and refurbishingits offices or transferred to its branch in Argentina. According to documents examined by El Mundo, a tax settlement was paidto the Spanish treasury, in theory by Messi but ultimately by Barca,which made up the amount in a complex transaction days before the playersigned a new contract last November.That contract, which runs until 2021, will pay Messi more than 100mneuros a year including salary and image rights according to informationpublished on Friday by the European Investigation Collaborations, whichincludes El Mundo.