In an unexpected turn of events, we need to take a look at the incredible loophole Real Madrid can use if they decide to sign Cristiano Ronaldo.
It appears Real Madrid can use a tax loophole if they chose to sign Cristiano Ronaldo, let us explain. As you all know, the one reason Los Blancos wouldn’t sign the star player is due to his elevated wage of €31 million. If he was a footballer who has been living in Spain for more than a year, the club would have to pay the usual taxes. However, this brilliant loophole consists on making Ronaldo sign a one-year contract in order to avoid quite a bit of money in taxes.
This allows Real Madrid to offer the star the same €31 million but only pay 19% of taxes as they consider him a visiting player. This means Real Madrid would only have to pay €40 million per season with taxes included. If you don’t remember, this was roughly what the club already paid for Ronaldo when he earned €20 million after-tax. This means Real Madrid has another bargaining chip if they chose to take Cristiano back for one season.
Ronaldo’s tax loophole explained by a pro.
Diario AS consulted lawyer Toni Roca, who is a Sports Law expert in Spain. He explained how the image rights are also something Cristiano Ronaldo would avoid paying to the taxman if he signed a one-year contract at Real Madrid. This is what he said: “If Real Madrid gave Cristiano a one-year contract, the Portuguese player would be considered a non-resident person in Spain. Since he doesn’t spend 183 days of the natural year living there, that’s how it works.
“As a non-resident, he can avoid paying 50% of his wage in taxes in Madrid. Also, he would avoid paying taxes from any income he makes from sponsors outside of the country. This means Ronaldo would only have to pay 19% of his wage in taxes as a Real Madrid player. The advantage for the club is that they would have to pay less for the player and pay him what he wants after tax. And the footballer would pay nothing for image rights in foreign soil.”