Report: Neymar Found Guilty Of Tax Evasion, Ordered To Pay Millions

Guilty. That’s the word out of Rio today. According to La Folha de Sao Paulo, a Brazilian administrative court has found Barcelona forward Neymar da Silva Santos Júnior, known simply as Neymar, guilty of tax fraud for failing to report earnings from a number of lucrative contracts. As a result, Neymar will have to pay 188.8 million Brazilian reals ($51.74 million U.S.) in penalty, interest and back taxes.

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Neymar, a native of Brazil, burst onto the soccer scene playing for the youth club Santos FC. He was reportedly sought after by major European clubs at the age of 14 but stayed in his home country to play for club Santos, making his professional debut with the club in 2009. It was during his time with Santos – and the negotiations before he joined the senior team – that the unclaimed income was allegedly paid to Neymar.
If that sounds like a familiar story, it is. Santos alleges that similar negotiations took place when Neymar signed with FC Barcelona. That contract, together with a winning team, helped Neymar climb the ranks of the soccer elite: in 2015, Neymar was ranked #82 on Forbes’ Celebrity 100 list and #23 on Forbes’ list of the World’s Highest Paid Athletes racking up $14 million in salary and $17 million in endorsements last year alone.

Barcelona’s Brazilian forward Neymar looks on during the UEFA Champions League Round of 16 second leg football match FC Barcelona vs Arsenal FC at the Camp Nou stadium in Barcelona on March 16, 2016. / AFP / PAU BARRENA (Photo credit should read PAU BARRENA/AFP/Getty Images)

Although Neymar made the move to Barcelona in 2013, Santos alleges that negotiations for Neymar began as early as 2011. Allegedly, payments related to that signing were made to a Brazilian company controlled by Neymar’s father, which Spanish prosecutors allege were disguised as other payments in order to avoid reporting and tax requirements. Payments were also made to Santos.

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Santos, believing it had been cheated, filed court papers in an effort to find out more details of the transaction. At the time, Neymar and his father denied any wrongdoing, suggesting that any resulting tax consequences of the sale would be addressed in Brazil. That’s exactly what happened last year when, in Brazil, Judge Carlos Muta charged Neymar with “omitting sources of income from abroad” from 2011 and 2013 (FC Barcelona was reportedly identified as the source of that income). As a result, Judge Muta had ordered 188.8 million reals ($47.75 million U.S.) of Neymar’s assets frozen.
A short time later, Neymar and his father were ordered to pay a €100,000 ($109,374 US) fine over unpaid tax amounts from 2007 and 2008. Neymar has appealed that ruling and is expected to appeal the most recent ruling.
And while it’s confusing, it’s worth noting that this court proceeding – which was administrative in nature – is separate from criminal proceedings which were initiated by federal prosecutors against Neymar last year. The Fifth Court opted not to allow that case to proceed in criminal court earlier this year, noting, at the time, that the administrative process had not yet been exhausted.
And that’s not all. In yet another twist, in 2015, a Spanish Court found that there was enough evidence to go to trial over allegations tied to the Santos to Barcelona transfer. While Neymar and his father have not been formally charged in Spain, Neymar’s club, FC Barcelona, will go to trial on tax fraud charges as will club president Josep Bartomeu, and former club president Alexandre “Sandro” Rosell. The team has denied any wrongdoing.

The latest ruling is just one in a litany of tax troubles involving FC Barcelona in recent years. In January of 2016, one of Neymar’s teammates, Javier Mascherano, pleaded guilty to two counts of tax fraud in Spain. Mascherano admitted that he failed to pay taxes on earnings for the years 2011 and 2012 which earned him a fine and jail time (he’ll likely avoid the jail time).

Another of Neymar’s teammates, Lionel Messi, is also facing allegations of tax fraud. Messi is scheduled to begin his trial on May 31, 2016, the same time as the Copa America Centenario. Messi’s lawyers are expected to ask that the trial be moved.