Hiding Behind a Shell
Soccer superstar, Cristiano Ronaldo, has been accused by the Spanish authorities of using what they believe to be a shell company in the Virgin Islands to “create a screen” in order to hide his total income, which amounts to almost £13m, from Spain’s Tax Office.
Ronaldo has been accused by Madrid’s regional state prosecutor of four counts of tax fraud from 2011 to 2014 and is alleged to have taken advantage of a business structure created in 2010 to hide [from fiscal authorities] his income generated in Spain from image rights.
According to the prosecutor, the Real Madrid forward had knowingly used a business structure to hide his image rights income in Spain between 2011 and 2014. The prosecutor also accused Ronaldo of declaring 11.5m Euro (£10.1m) earned in a tax return filed in 2014 when his real income was almost 43m Euro (£38m).
People sometimes try to hide money in a shell company to give the outward appearance of a legitimate business but hiding its true purpose and effective ownership.
When the authorities try to find out who really owns or controls the money in the company, they can be frustrated although more and more countries and tax-havens are signing up to protocols that facilitate increased transparency.
However, there are still times when the money-trail is complex and it takes a forensic accountant to determine who really owns what.