Barcelona, La Liga

Neymar-Gate Could Cost Barcelona €54.6m

neymar-barcelonaThis is turning into the year from hell for Barcelona supporters. After seeing their side fall short in the title race on the final day at home to Atletico, now they hear that Neymar-Gate could cost the club €54.6m in fines.

Earlier this year the Spanish public prosecutor charged Barcelona with tax evasion over the Neymar transfer. The issue revolves around the €37.92m Barça paid Neymar, €10m in 2011 and a further €27.92m in 2013. According to the Spanish tax authorities, these sums should have been subject to withholdings, as they were effectively signing-on bonuses, which are taxable in the same way as employment income.

Barca disputed that assessment, but once the investigation got underway the club submitted a €13.5m payment to the tax authorities to “cover any potential interpretation made concerning the contracts signed in the transfer process”, but the matter has not gone away.

Well the decision is in and Barcelona have been found guilty of tax evasion, to the tune of €9.1m. No big deal right, as the club has already give the tax authorities that €13.5m payment?

Wrong. According to Article 305 of Division XIV of the Spanish Penal Code, these sorts of offences carry a prison term ranging from one to five years and a fine of up to six times the amount of tax avoided.

So that €9.1m could easily turn into a €54.6m fine. To complicate matters further, this is the first time that a legal entity (i.e. a corporation), specifically a football club, has been charged with this sort of crime.

“This is a new situation, so there is no precedent as to sentencing”, stated the lawyer Xavier Albert Canal, a sports law specialist.

Canal added that Sandro Rosell had been “the instrument used by the club in order to commit the tax offence in question”.

A fifty four million euros fine would have obvious repercussions within the club, most noticeably in the team’s transfer budget. This summer’s window is critical for Barcelona because the threat of a two or three transfer window ban is hanging over the club due to the signing of underage players.

If they are hit with the maximum fine from the Spanish tax authorities, and thus are unable to refreshen and upgrade their squad, we could have seen the end of this brilliant Barca era.