The Barcelona prosecutor claims that, between 2006 and 2009, the defendants transferred Messi’s commercial rights to companies registered in tax havens, namely, to offshore companies in Belize and Uruguay. According to the charges made, these transactions did not actually take place, and throughout that time the royalties would have been received by Messi and his father instead of the companies. However, their obligations to pay tax in regard to these revenues were not fulfilled. The authorities claim that they should have paid about 4 million Euros in taxes on the royalties. Messi stated that they have always complied with tax regulations, in accordance with their tax consultants’ instructions.
Royalties are typically paid for the exploitation of intellectual property or of other rights possessing asset value. Rights possessing asset value may be related, inter alia, to works of copyright, patents, software, trademarks, know-how, industrial design and franchises. In the case of athletes, it is generally the so-called merchandising rights, that is, those commercial rights related to the reputation of the athlete which entail the presentation of his name or person in a commercial context. The most typical example of this is when a well-known football player consents, in return for royalties, to having his image displayed on the label of soft drinks bottles.
The individual who is the holder of the right can, at any time, and in return for royalties, transfer his right of exploitation to an enterprise for commercial purposes. The details of this case were not published in the media, so it can only be assumed that Messi and his father made use of such a possibility. However, it is important to emphasise that the fact of an individual’s transferring his right of exploitation of a right possessing asset value to a foreign enterprise does not in itself violate any legal regulation. Illegality cannot be established even if the foreign company concerned is an offshore company and has no obligation to pay taxes on the royalties received.
Objections may be raised to the abovementioned transaction if it lacks genuine economic substance. Where such substance is lacking, the economic transaction may be regarded by the authorities as fictive, and the individual concerned may be held responsible for it. Where the foreign (offshore) company does obtain the right possessing asset value, it is an essential condition that the transaction is not aimed exclusively at obtaining a tax benefit and, furthermore, that its rationale and economic substance are genuine
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