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Spanish prosecutors propose replacing Messi jail term with fine

Prosecutors in Barcelona say they are not against replacing football star Lionel Messi's 21-month jail sentence for tax fraud with a fine, a spokeswoman announced on Friday.

Published: 23 June 2017 11:05 CEST

Spanish prosecutors propose replacing Messi jail term with fine

Barcelona's football star Lionel Messi in court in the tax fraud case. Photo: AFP

They said they were willing to give the 29-year-old a fine of €400 ($450) a day for the duration of the sentence – an option that the defence of the Argentina international has also proposed.

That would amount to more than €250,000, although the court has the final decision over whether to go ahead with this option.

The daily fine would come on top of the €2.09 million fine Messi was also given when he and his father Jorge Horacio Messi were found guilty of tax fraud in a trial last year and sentenced to 21 months in jail.

Both appealed, but Spain's Supreme Court last month confirmed the jail term for the Barcelona striker, although it reduced Messi's father's sentence to 15 months.

The pair used companies in Belize, Britain, Switzerland and Uruguay to avoid paying taxes on €4.16 million of Messi's income earned from his image rights from 2007-09.

The income related to Messi's image rights that was hidden includes endorsement deals with Danone, Adidas, Pepsi-Cola, Procter & Gamble and the Kuwait Food Company.

Messi is not the only football star to run into problems with Spain's courts, with Real Madrid striker Cristiano Ronaldo the latest to have been summoned to appear before a judge investigating tax fraud.

He is due to be questioned on July 31st on suspicion of evading €14.7 million in taxes.

SEE ALSO: Ronaldo won't quit amid tax fraud accusations, says Real Madrid club boss

Can you pay taxes in Spain with a foreign bank account?

Navigating the ins and outs of the Spanish tax system can be a little daunting at times. That’s why many people choose to pay for a gestor to handle it all for them.

But for many foreigners in Spain, especially those with property in the country but who aren’t resident, figuring out when and how to pay your taxes can be extra complicated, especially if you don’t speak Spanish.

READ ALSO: What does a ‘gestor’ do in Spain and why you’ll need one

This was compounded by the fact that, for many years, you couldn’t pay Spanish taxes from a foreign bank account. As such, many people were forced to open a Spanish bank account for the sole purpose of paying tax.

Can you pay taxes in Spain with a foreign bank account?

Fortunately, it’s no longer like that. From February 1st 2024, the tax authorities in Spain started allowing tax payments via direct debit from any bank account within the SEPA area, removing the need for a Spanish bank account.

So, in short, yes, you can pay your Spanish taxes with a foreign bank account — depending on the country in which the account is based.

What is SEPA?

SEPA stands for Single Euro Payments Area is a basically an integrated bank transfer system. SEPA includes all the EU members states, plus those in the EFTA (Iceland, Norway, Liechtenstein and Switzerland). The UK is also still member of the SEPA area, despite Brexit.

Before the change, you could only pay your taxes in Spanish via banks approved by the tax authorities.

READ ALSO: Spanish tax returns: A handy guide for foreigners

VAT and tax experts Marosavat explain that under the previous rules, “direct debit [was] only available when the taxpayer’s bank account belongs to a bank entity cooperating with the Spanish tax authorities. This requirement impose[d] an important restriction when using direct debit as a payment method, especially for foreign taxpayers.”

But slowly, the Spanish tax authorities have eased the rules and made it easier for foreign businesses and tax payers to pay their tax from abroad. First, in March 2021, the rules were relaxed for foreign businesses with tax obligations in Spain.

Then from July 2023 foreign accounts were approved for deferment and split applications of tax debt, and from February 2024 for regular tax payments.

Following the changes, Marosavat says, “the payments will still be processed through a cooperating bank entity, which communicates with the taxpayer’s bank entity. In consequence, all commissions and bank expenses related to the procedure will be passed on by the tax administration to the taxpayer.”

According to Spain’s Agencia Tributaria website, which you can find an English language version of here:

Payments are allowed for those who do not have an open account in any collaborating entity in state collection management.　
It is especially intended for use by those who pay their debts from abroad.　
It can be done by both natural persons and legal entities.　
The payment will have releasing effects on the date of receipt and entry of the transfer.

Non-resident property owners

This is particularly welcome news for second home owners in Spain, many of whom are non-resident and manage their properties from abroad for most of the year.

According to IberianTax, by extending tax payments to the wider SEPA area, “property owners can now continue to use their home country’s bank accounts or accounts from other SEPA countries to make tax payments towards their taxes. This change simplifies the process and alleviates the burden of setting up a separate Spanish bank unnecessarily.”

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