The Spanish Public Prosecutor’s Office has reportedly accused Real Madrid manager Carlo Ancelotti of tax fraud, which could result in a four-year and nine-month prison sentence.

According to Relevo, Ancelotti faces two charges of tax evasion, with Spanish authorities alleging that he failed to declare income from image rights despite claiming tax residency in Spain. 

Additionally, the manager faces allegations of signing private contracts to transfer his image rights to entities for significant sums, subsequently altering these agreements to drastically reduce the prices involved.

The Italian allegedly used simulated image rights agreements, with entities that lacked real activity and were located outside of Spain, to conceal the true beneficiary of his income, enabling him to evade taxes both at home and abroad.

Moreover, other allegations have suggested that he assigned 50% of his image rights to Real Madrid while secretly retaining ownership through an undisclosed partnership.

In total, it has been reported that the manager has defrauded more than €1m from the Treasury in the years 2014 (€386,361) and 2015 (€675,718), which corresponds to his first time as Real Madrid manager between 2013 and 2015.

Despite the request from the Spanish Public Prosecutor’s Office to imprison Ancellotti, it is extremely unlikely the manager will face time behind bars.

In cases involving sports stars, settlements are usually reached. Xabi Alonso, former Real Madrid player and current Bayer Leverkusen manager, faced similar allegations in 2019. 

In Alonso’s case, the Public Prosecutor’s Office charged him with three offences against the Public Treasury for the years 2010, 2011 and 2012, requesting a two-and-half-year prison sentence and accusing him of transferring his image rights to a company registered in Madeira, a low-tax jurisdiction. 

However, Alonso maintained his stance, refusing to negotiate with tax authorities and the high court sided with him, ruling that his collaboration with the Kardzali company lacked any intention of concealment or dishonesty.

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