It is important for everyone to understand exactly why the club is being investigated by the Spanish Tax Authority. In the following paragraphs I am going to follow the chronology of the Neymar transfer and explain all of the 13 contracts signed for this deal and how the prosecutor has interpreted these contracts.

On November 15 2011 the first contract of the operation was signed between FC Barcelona (Represented by Sandro Rosell and Josep Maria Bartomeu as president and vice-president) and Neymar Jr, “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.” (Represented by Neymar Sr.) and Neymar Sr. as agent of the player. By this contract, “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.”, company that had claimed to own Neymar Jr.'s economic rights starting in 2014 when his contract with Santos was over and he would be a free agent, agreed to pass said economic rights along with the federative ones of the player to FC Barcelona starting with the 2014-2015 season. FCB acquired said rights for 40 million Euros. The contract also guaranteed the player a salary of 36.125.000 Euros in 5 years. The breach of this agreement by one of the signing parties (FC Barcelona not buying Neymar Jr. until August 25th 2014 or buying him before he was a free agent) would bring with it the payment of a 40 million euros penalty to the other party. This contract also stipulated the project for the player's work contract, image contract and representation and management contract, by which the player's agent would get 5% of all future payments made to Neymar Jr. and this company.

“N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.” is a company that was formally established on November 18th 2011 (3 days after this first contract was signed). The administrators of this company were Neymar Jr.'s parents, each with a 50% part.

The second contract was signed on December 6th 2011 as a "loan contract" by which FC Barcelona gave “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.” 10 million Euros, sum which would be repaid when Neymar Jr. signed for FC Barcelona in 2014.

The prosecutor considers the 40 million Euros stipulated in the first contract to be a signing bonus for Neymar Jr., not a payment made to a company to acquire his rights. It also sees the 10 million paid in December 2011 as a first installment of said signing bonus. In 2011 Neymar Jr. wasn’t a Spanish Resident which means that FC Barcelona would have been under the obligation to pay the Non-Resident Income Tax associated with this payment to the Spanish Tax Authority. At the rate of 24%, this means 2.4 million Euros. The prosecutor claims Sandro Rosell was the one who decided against paying the required sum to the Tax Authority.

In 2013, according to their statements Sandro Rosell and Josep Maria Bartomeu, after a reunion with the first team’s coach at the time, decided to move up Neymar Jr’s transfer by one year. They didn’t get the approval for this from the Club’s Board; Rosell was the one leading the negotiations. Moving up the transfer by one year meant that Neymar Jr. wasn’t yet a free agent and they had to acquire his federative rights from Santos FC. Also, in order to incentivize the player to move one year earlier than it was agreed he was offered additional money that hadn’t been stipulated in the 2011 contract.

Once the negotiations were concluded Rosell and Bartomeu decided to publicly state that the cost of acquiring the player was 57.1 million Euros (the 40 million agreed on in 2011 and 17.1 million paid to Santos for his federative rights). This decision was caused by the fact that on May 14^th 2013 the Club’s Board had agreed to spend a maximum of 70 million Euros on the transfers made in the summer of 2013.

The prosecutor considers that the additional contracts signed between FC Barcelona and Santos FC and FC Barcelona and other companies were designed to hide the real cost of the transfer and had no real purpose other than paying for said transfer. By claiming that the cost of the operation was lower than it actually was Rosell caused harm to the Club which was controlling its spending in order to reduce its debt.

There were 4 contracts signed between FC Barcelona and Santos FC:

1. The transfer of Neymar Jr.’s federative rights for 17.1 million Euros. This contract was signed by Sandro Rosell and Josep Maria Bartomeu on FC Barcelona’s part on May 13^th 2013.
2. Contract for the collaboration between the academies of the 2 clubs and the right of first refusal by FC Barcelona over 3 Santos FC players. Total cost 7.9 million Euros. The players in question were:
   1. Victor Andrade Santos (for which FC Barcelona paid 3.2 million Euros). This player was later transferred by Santos FC to the Portuguese club Sport Lisboa e Benfica for free. FCB claimed that the player hadn’t evolved as they had expected him too, thus renouncing its rights to him.
   2. Gavilando Pulgas da Silva (for which FC Barcelona paid 1.8 million Euros). FCB didn’t acquire later because he hadn’t fulfilled his expected evolution.
   3. Gabriel Barbosa Almeida (for which FC Barcelona paid 2.9 million Euros). FCB still has the rights of first refusal over this player, but it hasn’t executed them yet. The agreement ends on September 24^th 2015.

This contract was signed by Sandro Rosell and Josep Maria Bartomeu on FC Barcelona’s part on July 25^th 2013.

3. Agreement for a friendly game between FC Barcelona and Santos FC organized by the Brazilian club. This contract was signed on May 31^st 2013, Rosell and Bartomeu being FC Barcelona’s representatives. In addition to this contract Rosell and Bartomeu signed a letter to Santos FC’s president by which they said that if this game wasn’t played during the time that Neymar Jr.s was a player of FCB the Catalan club had to pay Santos FC 4.5 million Euros.
4. Agreement for Santos FC to be the team invited to play in the 2013 Joan Gamper Trophy in Barcelona. Contract signed on May 31^st 2013.

In addition to these 4 contracts Rosell and Bartomeu also signed a letter to Santos FC’s president obligating FC Barcelona to pay Santos FC 2 million Euros in case Neymar Jr. was one of the 3 finalists for the Ballon D’Or during his stay at the Catalan club.

In total FC Barcelona has paid Santos FC 25.141.000 Euros:

• 17.271.000 Euros on June 30^th 2013 (17.1 million Euros for the player’s economic and federative rights and 1% of this amount as commission for the transfer of funds);
• 5.944.750 Euros on July 31^st 2013 and 1.955.250 Euros on August 31^st 2013 (payments made for the contract for collaboration between the 2 academies).

There were 7 contracts signed in 2013 between FC Barcelona, Neymar Jr., Neymar Sr. and various companies that Neymar Sr. administers.

1. Contract to dissolve the agreement signed on November 15^th 2011. This contract was signed on June 3^rd 2013 by Sandro Rosell and Josep Maria Bartomeu as representatives of FC Barcelona and Neymar Jr., “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.” and Neymar Sr.
2. Contract to acknowledge the breach of the 2011 contract by FC Barcelona which was thus obligated to pay the 40 million Euros penalty fee that had been agreed on in 2011. This contract was signed on June 3^rd 2013 by Sandro Rosell and Josep Maria Bartomeu as representatives of FC Barcelona and Neymar Sr, as representative of “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.”. This contract had an addendum added on July 31^st 2013 that stipulates the payment will be made in installments to accounts of “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.”: the 10 million Euros paid in 2011, 25 million Euros to be paid on September 16^th 2013, 5 million Euros to be paid on January 30^th 2014.

The prosecutor considers these 2 contracts to be nothing else than the execution of the contract signed in 2011, making these 3 installments part of his signing bonus and subject to the same Non-Resident Income Tax payment.

3. Work contract, signed on June 3^rd 2013 by Sandro Rosell and Josep Maria Bartomeu on FC Barcelona’s part and Neymar Jr. and Neymar Sr.(as agent of the player). This contract stipulates the payment of a signing bonus of 8.5 million Euros (paid on September 15^th 2013) that wasn’t agreed on in 2011. The Non-Resident Income Tax was paid to the Tax Authority for this amount. The contract also guarantees the player a salary of 45.9 million Euros as a minimum for the 5 year duration of contract, more than the figure agreed on in 2011.
4. Image contract, signed on June 3^rd 2013 by Sandro Rosell and Josep Maria Bartomeu on FC Barcelona’s part and “N&N ADMINISTRAÇAO DE BENS, PARTICIPAÇOES E INVESTIMENTOS LTD.” (Company that owns Neymar Jr.’s image rights) represented by Neymar Sr. and Neymar Jr.. One of the articles of this contract stipulates that a payment of 1.5 million Euros will be made to this company for accepting the transfer of the player’s federative rights. FC Barcelona paid the Tax Authority 15% of this, meaning 225.000 Euros, as a royalty fee. The contract also stipulated that “N&N ADMINISTRAÇAO DE BENS, PARTICIPAÇOES E INVESTIMENTOS LTD.” would be paid a minimum of 900.000 Euros/season for the player’s image rights.
5. Contract for representation and management, signed on June 3^rd 2013 by Sandro Rosell and Josep Maria Bartomeu on FC Barcelona’s part and “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.” represented by Neymar Sr. and Neymar Jr.. The object of the contract is payment to the player’s agent (Neymar Sr.) for his services in the amount of 5% of sums paid to the player and the company that owns his image rights. For the year 2013 that would mean 5% of the following : the player’s bonus signing of 8.5 million Euros, the 1.5 million Euros bonus paid for the image rights and the 2.549.700 Euros salary that the player gained between July and December 2013. All these figures sum up to 627.485 Euros paid in 2013 to “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.”.

The prosecutor considers that these payments are in fact made to the player, not to his agent, because the agent doesn’t work for the club, he works for the player and in the player’s work contract (Number 3 on this list) it is stipulated that the services of his consultant/agent during the signing of this contract are his responsibility.

6. Contract for the observation and scouting of Santos FC and other players in Brazil. This is signed on June 3^rd 2013 by Sandro Rosell and Josep Maria Bartomeu on FC Barcelona’s part and “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.” represented by Neymar Sr.. Payment for these services is in the amount of 400.000 Euros/season, total of 2 million Euros for 5 years. The payments are made regardless of if “N&N CONSULTORIA ESPORTIVA E EMPRESARIAL LTDA.” will get any players to sign for FC Barcelona in these 5 years.
7. Agency contract signed on June 3^rd 2013 by Sandro Rosell and Javier Faus on FC Barcelona’s part and “NEYMAR SPORT E MARKETING S/S LTDA – NR SPORTS” represented by Neymar Sr.. The object of the contract is finding marketing partners for the Club and the player in Brazil. Payment for these services is in the amount of 800.000 Euros/season, total of 4 million Euros for 5 years. The payments are made regardless of if “NEYMAR SPORT E MARKETING S/S LTDA – NR SPORTS” will manage to find any marketing partners for the Club in these 5 years.

The prosecutor considers that all these contracts are just a way of covering payments made to the player and that they have no real purpose other than that.

In summary the cost for the acquisiton of Neymar Jr. was 83.371.000 Euros.

• 25.171.000 Euros to Santos FC;
• 10 million signing bonus installment in 2011;
• 25 million signing bonus installment in 2013;
• 5 million signing bonus installment in 2014;
• 8.5 million signing bonus stipulated in the player’s work contract in 2013;
• 1.5 million bonus stipulated in the image rights contract in 2013;
• 627.485 Euros agent fee in 2013;
• 400.000 Euros for scouting in 2013;
• 800.000 Euros stipulated in the agency contract in 2013;
• 1.275.000 Euros in image rights over the year of 2014;
• 297.515 Euros paid in September 2014, not determined for what exactly.
• 1.6 million Euros for scouting remaining to be paid;
• 3.2 million Euros stipulated in the agency contract remaining to be paid.

In case the friendly organized by Santos FC isn't played an additional 4.5 million Euros will be added to this amount. In case Neymar is a finalist for the Ballon D'Or in the 5 years of his contract with FC Barcelona an additional 2 million Euros will be added to this amount.

The prosecutor considers that by lying about the total cost of the transfer and using simulated contracts to cover said cost Sandro Rosell caused economic damage to the Club, accusing him of corporate crime.

The taxes that the prosecutor considers were not paid to the Spanish Tax Authority are as follows:

• 24% (Non-Resident Income Tax) of the 10 million Euros signing bonus installment paid in 2011 (2.4 million Euros).
• 24.75% (Non-Resident Income Tax) of the 25 million signing bonus installment paid in 2013 (6.187.500 Euros).
• 24.75% (Non-Resident Income Tax) of the 1.5 million bonus stipulated in the image rights contract in 2013 (371.250 Euros). A royalty fee was paid for this in the amount of 225.000 Euros (15%) which means that just an additional 146.250 Euros weren’t paid.
• 24.75% (Non-Resident Income Tax) of the 627.485 Euros agent fee paid in 2013 (155.302,54 Euros)
• 24.75% (Non-Resident Income Tax) of the 400.000 Euros scouting fee paid in 2013 (99.000 Euros)
• 24.75% (Non-Resident Income Tax) of the 800.000 Euros agency fee paid in 2013 (198.000 Euros)
• 52% (Resident Income Tax) of the 5 million signing bonus installment paid in 2014 (in 2014 Neymar Jr. spent more than 183 days in Spain, making him a fiscal resident of the country) (2.6 million Euros)
• 52% (Resident Income Tax) of the 1.275.000 Euros in image rights paid in 2014 (663.000 Euros). A royalty fee of 191.250 (15%) was paid for this amount, which means that an additional 471.750 Euros was unpaid.
• 52% (Resident Income Tax) of the 297.515 Euros paid in September 2014 (157.707,8 Euros). For this the Club paid a Non-Resident Income Tax in the amount of 76.634,96 Euros, which means that there is an additional 81.072,84 Euros unpaid.

On February 24^th 2014 FC Barcelona paid an additional 1.237.500 Euros to the Spanish Tax Authority, applying a 24.75% (Non-Resident Income Tax) quota to the 5 million paid on Janury 30^th , after the Court notified them that they were investigated for tax evasion in this case. This amount can be subtracted from what the club hadn’t paid in 2014, bring the sums owned for each year to 2.4 million Euros for 2011, 6.786.052,54 Euros for 2013 and 1.915.322,84 Euros for 2014.

On February 24^th 2014 FC Barcelona paid an additional 13.550.830,56 Euros to the Spanish Tax Authority, claiming to cover the eventual differences in interpretation between the club and the prosecutor of the amounts the club was supposed to pay. This amount was explained in a statement made by the club on September 30^th 2014 as being:

• 10.352.302,54 Euros for the taxes unpaid in 2013:
  • 2.475.000 Euros: 24.75% (Non-Resident Income Tax) of the 10 million Euros paid in 2011, although the payment was supposed to be for 2013
  • 297.000 Euros: 24.75% (Non-Resident Income Tax) for the 1.2 million paid in 2013 in scouting (0.4 million Euros) and agency (0.8 million Euros) fees.
  • 7.580.302,54 Euros: 24.75% (Non-Resident Income Tax) of the 30.627.485 Euros paid in signing bonus (30 million Euros) and agent fees (627.485 Euros). In reality only 25 million Euros of the signing bonus was paid in 2013, the other 5 million being paid in 2014.

• 3.198.528,02 Euros for any other sanctions, late fees, etc.

The 10.352.302,54 Euros amount doesn’t cover all the unpaid taxes from 2011, 2013 and 2014 and some of the parts paid are under a wrong quota.

The late fees are the following: 251.852,68 Euros for 2011, 119.202,99 Euros for 2013 and 1.894,86 Euros for 2014. In total 372.950,53 Euros.

As a result of this investigation the prosecutor accuses

• Sandro Rosell of
  • tax evasion corresponding to the year 2011
  • tax evasion corresponding to the year 2013;
  • Corporate crime.
• Josep Maria Bartomeu of
  • Tax evasion corresponding to the year 2014.
• FC Barcelona of
  • tax evasion corresponding to the year 2011;
  • tax evasion corresponding to the year 2013;
  • tax evasion corresponding to the year 2014.

The prosecutor asks for the following sentences:

• For Sandro Rosell
  • For tax evasion corresponding to the year 2011 a period of 3 years and 3 months in prison and a fine of 4.8 million Euros;
  • For tax evasion corresponding to the year 2013 a period of 3 years and 6 months in prison and a fine of 20.358.157,62 Euros;
  • For corporate crime a period of 9 months in prison.
• For Josep Maria Bartomeu
  • For tax evasion corresponding to the year 2014 a period of 2 years and 3 months in prison and a fine of 3.830.645,68 Euros;
• For FC Barcelona
  • For tax evasion corresponding to the year 2011 a fine of 4.800.000 Euros;
  • For tax evasion corresponding to the year 2013 a fine of 13.572.105,80 Euros;
  • For tax evasion corresponding to the year 2014 a fine of 3.830.645,68 Euros.

Image Source: FC Barcelona