Lionel Messi and Cristiano Ronaldo are quite simply two of the greatest athletes to ever kick a football. Both are absolutely dazzling to watch with a ball at their feet and continue to amass milestone and milestone in both a personal and team capacity (not to mention, Ronaldo’s 2009 transfer from Manchester United to Real Madrid set the latter back a cool 80 million pounds, the most expensive transfer fee in history at the time). It seems the two can be likened to a bottle of fine wine: they only seem to get better with age. The Messi vs. Ronaldo debate continues to divide football fans worldwide: who’s the superior footballer and who would you rather have in your team and why? There’s no doubt that these two will go down in the annals of history for their unmatched skill, bur recently they’ve been making headlines for all the wrong reasons. The two have each been involved in massive tax evasion scandals that has landed Messi an upheld 21-month prison sentence (not to mention a HUGE fine), and Ronaldo facing similar charges. The AFY team have investigated each of the scandals and as it turns out, there are certainly lessons to be learnt (because we think it’s fair to assume that nobody wants to spend time in the slammer!)

What Happened?

Argentinian star Lionel Messi and his father, Jorge Horacio Messi, were found guilty of using companies in Belize, Britain, Switzerland and Uruguay to avoid paying taxes on 4.16 million euros. A similar charge of tax evasion has been laid upon Ronaldo. Prosecutors are contending Ronaldo has defrauded the Spanish government out of 14.7 million euros by failing to pay taxes on deals relating to his image rights, again by using offshore structures. We don’t need to tell you that hundreds of millions of dollars separate these star players from the average taxpayer, but that doesn’t mean we can’t learn from the mistakes made by these two megastars.

Transparency

First off, it’s obvious that hiding things, whenever it comes to tax and money, almost always looks suspicious. Spanish prosecutors noted that in Messi’s case, the beneficial owners of the companies names were always hidden. Increasingly across Australia and other Western countries, such as the US, there is an emphasis on pristine documentation, reporting and disclosure. Non-compliance can trigger severe penalties and using companies secretively can make wilful even innocent activity.  Always exercise full transparency!

Accountability

Messi and Ronaldo have both stated of their cases that they have always intended to comply with Spanish tax law. Sorry gents, but tax laws aren’t exercised on the basis of good intentions – otherwise everyone would rely on this excuse. It doesn’t matter if you have limited income or an endless pit of dollar bills, if you engage in opaque deals that appear to be tax motivated, it is extremely likely if the deals are fraudulent you will be found guilty. Although Messi claimed his father took the role of setting up the chain of shell companies, Messi signed off on all tax returns. Be careful about tax motivated deals and if unsure, always opt for independent, third party advice (especially if you can afford it, which we’re sure Messi could).

So there you have it, Messi and Ronaldo are teaching us more than just how to play the beautiful game. When it comes to tax reporting, transparency and accountancy are universal rules to play by. It doesn’t matter if you’re a celebrity or a regular Jo; they say ignorance is bliss, but don’t think you can remain unaware and not get caught, the bar is high and willful blindness is enough!