Real Madrid coach Ancelotti claims innocence amid tax fraud trial

Real Madrid coach Carlo Ancelotti denied having intentionally committed tax fraud on the opening day Wednesday of his trial for allegedly failing to declare income to Spain’s tax office, the latest in a string of such cases targeting sports figures in the country.

Prosecutors are seeking a jail term of four years and nine months for the 65-year-old Italian, accusing him of failing to pay more than one million euros ($1.1 million) due to undeclared earnings from image rights in 2014 and 2015 during his first spell at the club.

They argue Ancelotti — who as a coach has won a record five Champions League trophies including three with Real Madrid — had only reported the salary he was paid by the club and omitted income from his image rights in his tax returns during this period.

Prosecutors allege he set up a “confusing” and “complex” system of shell companies to hide his extra earnings during this time from his image rights and other sources such as real estate.

Ancelotti told the High Court of Justice in Madrid that on the advice of the club, a firm was set up so he could collect 15 percent of his annual salary of six million euros in image rights.

He never realised that this allowed him to pay less tax, Ancelotti added.

“I never realised that something wasn’t right” until 2018 when the public prosecutor’s office opened a probe into his finances, the Real Madrid coach said, saying he “never considered committing fraud”.

“At that time, all the players and coaches were doing it that way, it seemed like the right thing to do,” he said, adding former Real coach Jose Mourinho had a similar arrangement.

“When the club suggests it to me, I put Real Madrid in touch with my advisor. I didn’t deal with it because I had never been paid that