FC Barcelona admits it committed tax fraud in the Neymar signing

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FC Barcelona admits it committed tax fraud in the Neymar signing

A dark chapter in the club unravels as the board admits guilt on a crime

By approving the deal with the prosecution in the Neymar case, FC Barcelona admitted that it had deliberately defrauded the Tax Office to lower the cost of Neymar’s signing. This is what is revealed from reading the whole text of the agreement which was signed on Monday and presented to the club’s members who want to see it starting this Tuesday. In a six page text, Barça, as a legal entity, assumes all the responsibility of the case and thus agrees to pay the €5.5 million fine and exonerates the former president Sandro Rosell and the current president Josep Maria Bartomeu.

The signed agreement – the first step in the initialization of the oral phase of the trial which will end with a verdict from the judge declaring Barça guilty in accordance with what has been agreed already – states that the initial contract signed with Neymar in 2011 had the purpose of “hiding the real operation that was realized, therefore failing to comply with the club’s tax obligations,” given the fact that the judicial resolution determined the €10 million paid in 2011 to be “an advance of the player’s compensation.”

So in 2011, two years before Neymar came to Barça, the club defrauded €2.4 million, which correspond to the first crime that the club is convicted for, resulting in a fine of €1.44 million, exactly 60% of the defrauded amount.

The settlement makes it clear that the contracts signed between the club and Neymar’s father’s various companies “had the primary objective of reducing the cost that the operation of signing the player meant for the institution […] and to sensitively hide or minimize the taxes that the club was supposed to pay to the Tax Office” and that these contracts were “verified by the institution, approved and authorized by the people who in those dates had the authority of making decisions in its name and who wielded the powers of organization and control in the institution.”

The second crime that Barça admits guilt for happened in 2013, when Neymar’s signing was finalized. In addition to the money paid to Santos, the blaugrana club paid €40 million to three companies owned by Neymar’s family. According to the deal, the club admits that “these companies wanted to pretend that the payment was made for commercial operations,” but in reality “they were just dividing the player’s compensation to keep it hidden.” Which means that the money Barça paid those companies was actually salary for Neymar paid in advance (in addition to the €36,125,000 that the player had as a guaranteed salary over the next 5 years).

The resolution explains the different contracts that were signed (you can read about them here) and qualifies them as being “simulated”. It also clarifies that the type of tax retentions that were made then (the majority between 5% and 15% when they should have been 24.75% for the Non-Resident Income Tax). So in 2013, Barça defrauded a total of €6,786,052.54, which correspond to the second crime that the club is convicted of, resulting in a fine of €4,071,631.52.

The deal also “agrees to the dismissal and archiving of the cases against Sandro Rosell, Josep Maria Bartomeu and FC Barcelona in relation to the fiscal year of 2014,” thus meaning that it is considered that there was no crime committed in that year. As a consequence of the first two resolutions of the agreement, Barça is “accused and responsible” of the two crimes and accepts the economic fine of €5.5 million, while Rosell and Bartomeu are exonerated.

In addition to the judicial document of the settlement with the prosecution and the State’s Attorney, Barça has also allowed its members to see the document that contains the agreements that the board made on the day that they accepted this deal. In that meeting, on June 13th, the board decided to go ahead with this agreement with 14 votes in favor, 2 against and 2 abstentions.

After that, president Josep Maria Bartomeu talked to the press, assuring the public that they had made “the best decision for the club” and defined the judicial conflict regarding Neymar’s transfer as “an error in fiscal planning.” But in the meeting, the executives had voted to “reach an agreement that recognizes incorrect tax payments” and “accept that the club has committed two crimes against the Tax Office.”

All the members that wish to see these documents can do so by presenting themselves with an ID card at FC Barcelona’s Supporter Services Office (OAB).

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Source: Diari Ara, Sport