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Soccer Star Ronaldo’s Tax Goals


By Orlando Gotay

In recent days, we have learned that Spanish tax authorities are charging soccer superstar Cristiano Ronaldo with various counts of what amounts to be tax evasion. Potential penalties can be steep. Some talk mentions prison time of up to two years per year of the allegedly fraudulent conduct… give or take, about six years. Ouch.

Just what did Ronaldo allegedly do? As a superstar, Ronaldo earns oodles of money by endorsing various kinds of products and brands, such as Nike, Samsung, and Tag Heuer. Normally those kinds of deals are relatively straightforward. I do some endorsement for company X, it pays me, and I am subject to income tax on those amounts.

In anticipation of these deals Ronaldo assigned his “image rights” to a company set up for him in the British Virgin Islands, Tollin Associates. In turn, Tollin transferred those rights to two Irish companies, Polaris Sports and Multisports Image Management. Those would contract with companies (like Nike and others) and receive payments. Eventually the income would end up at the BVI company. Ronaldo, according to investigators, would personally only receive a small fraction of the revenues, and the remainder would stay “parked” in the BVI away from Spanish taxation. No wonder Spanish Hacienda is unhappy. The total amount was about 150 million euros.

Why, you wonder, am I writing about this? Well, one of the reasons this is an evasion case is because that chain of offshore companies likely had no real business purpose, and Spanish Hacienda believes it was just to hide the true details of the transactions and pay little tax.

From time to time I hear of folks trying to pull smaller scale “Ronaldos.” Some involve property ownership in Mexico through a corporation, LLCs, or partnerships. The properties generate income, but the true owner somehow does not “see” the income and not report it on a federal income tax return. Some believe that using foreign entities also helps by not filing odious Foreign Bank Account Reports and other equally intrusive IRS forms, all precisely designed to lay out exactly what US persons have out there.

Ronaldo’s case is the extreme, a criminal prosecution. On the milder side, for civil penalties you should know this: not filing any of the required US information returns as they are due will keep your personal return open for audit, assessment, and penalty forever. Ouch, that’s a long time. Considering the ongoing information exchanges between US and international tax administrations, the stakes in the shell game are becoming considerably higher. Think twice about the true cost of “clever” structures.


Orlando Gotay is a California licensed tax attorney (with a Master of Laws in Taxation) admitted to practice before the IRS, the US Tax Court, and other taxing agencies. His love of things Mexican has led him to devote part of his practice to the tax matters of US expats in Mexico. He can be reached at


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