It is important for everyone to understand exactly why the club is being investigated by the Spanish Tax Authority (STA). 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 Nov. 15, 2011, the first contract of the operation was signed between FC Barcelona (represented by Sandro Rosell as president, and Josep Maria Bartomeu as vice-president), and Neymar Jr., N&N Consultoria Esportiva E Empresarial Ltda. (N&N, represented by Neymar Sr.), and Neymar Sr. as agent of the player.

By this contract, N&N – the 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.

FC Barcelona acquired said rights for €40 million. The contract also guaranteed the player a salary of €36,125,000 in five years. The breach of this agreement by one of the signing parties (FC Barcelona not buying Neymar Jr. until Aug. 25, 2014, or buying him before he was a free agent) would bring with it the payment of a €40-million-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 percent of all future payments made to Neymar Jr. and this company.

N&N is a company that was formally established on Nov. 18, 2011, three days after this first contract was signed. The administrators of this company were Neymar Jr.’s parents, each with a 50-percent-part.

The second contract was signed on Dec. 6, 2011 as a “loan contract” by which FC Barcelona gave N&N €10 million, a sum which would be repaid when Neymar Jr. signed for FC Barcelona in 2014.

The prosecutor considers the €40 million 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 (NRIT) associated with this payment to the STA. At the rate of 24 percent, this means €2.4 million. The prosecutor claims Rosell was the one who decided against paying the required sum to the tax authority.

In 2013, according to their statements, Rosell and 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 what 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 (the €40 million agreed on in 2011 and €17.1 million paid to Santos FC for his federative rights). This decision was caused by the fact that on May 14, 2013, the Club’s Board had agreed to spend a maximum of €70 million 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 four contracts signed between FC Barcelona and Santos FC:

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

This contract was signed by Rosell and Bartomeu on FC Barcelona’s part on July 25, 2013.

  1. Agreement for a friendly game between FC Barcelona and Santos FC organized by the Brazilian club. This contract was signed on May 31, 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. was a player of FC Barcelona, the Catalan club had to pay Santos FC €4.5 million.
  2. Agreement for Santos FC to be the team invited to play in the 2013 Joan Gamper Trophy in Barcelona. Contract signed on May 31, 2013.

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

In total FC Barcelona has paid Santos FC €25,141,000:

  • €17,271,000 on June 30, 2013 (€17.1 million for the player’s economic and federative rights and 1 percent of this amount as commission for the transfer of funds);
  • €5,944,750 on July 31, 2013 and €1,955,250 on Aug. 31, 2013 (payments made for the contract for collaboration between the two academies)

There were seven 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 Nov. 15, 2011. This contract was signed on June 3, 2013 by Rosell and Bartomeu (as representatives of FC Barcelona), and Neymar Jr., N&N, 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 penalty fee that had been agreed on in 2011. This contract was signed on June 3, 2013 by Rosell and Bartomeu (as representatives of FC Barcelona), and Neymar Sr. (as representative of N&N). This contract had an addendum added on July 31, 2013 that stipulates the payment will be made in installments to the account of N&N: the €10 million paid in 2011, €25 million to be paid on Sept. 16, 2013, €5 million to be paid on Jan. 30, 2014.

The prosecutor considers these two contracts to be nothing else than the execution of the contract signed in 2011, making these three installments part of his signing bonus and subject to the same NRIT payment.

  1. Work contract, signed on June 3, 2013 by Rosell and 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 (paid on Sept. 15, 2013) that wasn’t agreed on in 2011. The NRIT was paid to the STA for this amount. The contract also guarantees the player a salary of €45.9 million as a minimum for the 5-year-duration of contract, more than the figure agreed on in 2011.
  2. Image contract, signed on June 3, 2013 by Rosell and Bartomeu on FC Barcelona’s part, and N&N (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 will be made to this company for accepting the transfer of the player’s federative rights. FC Barcelona paid the STA 15 percent of this, meaning €225,000, as a royalty fee. The contract also stipulated that N&N would be paid a minimum of €900,000 per season for the player’s image rights.
  3. Contract for representation and management, signed on June 3, 2013 by Rosell and Bartomeu on FC Barcelona’s part, and N&N (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 percent of sums paid to the player and the company that owns his image rights. For the year 2013, that would mean 5 percent of the following: The player’s bonus signing of €8.5 million, the €1.5 million bonus paid for the image rights, and the €2,549,700 salary that the player gained between July and December 2013. All these figures add up to €627,485 paid in 2013 to N&N.

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.

  1. Contract for the observation and scouting of Santos FC and other players in Brazil. This was signed on June 3, 2013 by Rosell and Bartomeu on FC Barcelona’s part, and N&N (represented by Neymar Sr.). Payment for these services is in the amount of €400,000 per season, total of €2 million for five years. The payments are made whether or not N&N will get any players to sign for FC Barcelona in these five years.
  2. Agency contract signed on June 3, 2013 by Rosell and Javier Faus on FC Barcelona’s part, and “Neymar Sport E Marketing S/S LTDA-NR Sports” (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 per season, total of €4 million for five years. The payments are made whether or not NR Sports will manage to find any marketing partners for the club in these five 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:

  • €25,171,000 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 agent fee in 2013;
  • €400,000 for scouting in 2013;
  • €800,000 stipulated in the agency contract in 2013;
  • €1,275,000 in image rights over the year of 2014;
  • €297,515 paid in Sept. 2014, not determined for what exactly;
  • €1.6 million for scouting remaining to be paid;
  • €3.2 million 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 will be added to this amount. In case Neymar is a finalist for the Ballon D'Or in the five years of his contract with FC Barcelona, an additional €2 million 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, Rosell caused economic damage to the club, accusing him of corporate crime.

The taxes that the prosecutor considers were not paid to the STA are as follows:

  • 24 percent (NRIT) of the €10 million signing bonus installment paid in 2011 (€2.4 million);
  • 24.75 percent (NRIT) of the €25 million signing bonus installment paid in 2013 (€6,187,500);
  • 24.75 percent (NRIT) of the €1.5 million bonus stipulated in the image rights contract in 2013 (€371,250). A royalty fee was paid for this in the amount of €225,000 (15 percent) which means that just an additional €146,250 weren’t paid;
  • 24.75 percent (NRIT) of the €627,485 agent fee paid in 2013 (€155,302.54);
  • 24.75 percent (NRIT) of the €400,000 scouting fee paid in 2013 (€99,000);
  • 24.75 percent (NRIT) of the €800,000 agency fee paid in 2013 (€198,000);
  • 52 percent Resident Income Tax (RIT) 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);
  • 52 percent (RIT) of the €1,275,000 in image rights paid in 2014 (€663,000). A royalty fee of €191,250 (15 percent) was paid for this amount, which means that an additional €471,750 was unpaid;
  • 52 percent (RIT) of the €297,515 paid in Sept. 2014 (€157,707.8). For this, the club paid an NRIT in the amount of €76,634.96, which means that there is an additional €81,072.84 unpaid.

On Feb. 24, 2014, FC Barcelona paid an additional €1,237,500 to the STA, applying a 24.75 percent NRIT quota to the €5 million paid on Jan. 30, 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, bringing the sums owed for each year to €2.4 million for 2011, €6,786,052.54 for 2013, and €1,915,322.84 for 2014.

On Feb. 24, 2014, FC Barcelona paid an additional €13,550,830.56 to the STA, 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 Sept. 30, 2014 as being:

  • €10,352,302.54 for the taxes unpaid in 2013;
  • €2,475,000: 24.75 percent (NRIT) of the €10 million paid in 2011, although the payment was supposed to be for 2013;
  • €297,000: 24.75 percent (NRIT) for the €1.2 million paid in 2013 in scouting (€0.4 million) and agency (€0.8 million) fees;
  • €7,580,302.54: 24.75 percent (NRIT) of the €30,627,485 paid in signing bonus (€30 million) and agent fees (€627,485). In reality, only €25 million of the signing bonus was paid in 2013, the other €5 million being paid in 2014;
  • €3,198,528.02 for any other sanctions, late fees, etc.

The €10,352,302.54 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 for 2011; €119,202.99 for 2013 and €1,894.86 for 2014. In total, €372,950.53.

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 three years and three months in prison and a fine of €4.8 million;
  • For tax evasion corresponding to the year 2013, a period of three years and six months in prison and a fine of €20,358,157.62;
  • For corporate crime, a period of nine months in prison.

For Josep Maria Bartomeu

  • For tax evasion corresponding to the year 2014, a period of two years and three months in prison and a fine of €3,830,645.68;

For FC Barcelona

  • For tax evasion corresponding to the year 2011, a fine of €4,800,000;
  • For tax evasion corresponding to the year 2013, a fine of €13,572,105.80;
  • For tax evasion corresponding to the year 2014, a fine of €3.830,645.68.

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