Cristiano Ronaldo’s offshore adventures

Messi. Forget Messi. There are people who still consider Messi to be the best in the world. Just because Lionel Messi was football's World Player of the Year five times to Cristiano Ronaldo's three? Just because Messi has won the Champions League four times and Ronaldo three? Just because Messi scored 50 league goals in a single season to Ronaldo's 48? All of that is true, but it hardly matters beyond the game. If you're looking for the truth in football on the pitch, then you are, in fact, clueless.

The truth is that Lionel Messi got caught. This summer, he was forced to appear in a Spanish court in Barcelona, where he was slapped with a suspended jail sentence of 21 months for tax fraud. The court also ordered him to pay a fine of two million Euro because he and his father evaded taxes on 4.1 million Euro.

And Ronaldo? Or, more precisely, Mr. Cristiano Ronaldo dos Santos Aveiro, as he is named in his Spanish tax returns? At the end of 2014, he discreetly pocketed 63.5 million Euro, but didn’t pay a single Euro in tax on that money. And he might even get away with it. It might even have been legal. He earned 63.5 million Euro, before and after taxes, with no court case, no criminal offense and presumably not even a guilty conscience.

So who is better at football? Ronaldo! Unless, after this article appears, a Spanish tax investigator realizes that it shouldn’t be legally possible to set up the kind of shell company in the British Virgin Islands that has been bunkering Ronaldo’s millions for years – through an account with a private Swiss bank. Neither the 63.5 million Euro nor the foreign accounts appear anywhere in his tax declaration.

What is it that Ronaldo said about himself? “I’m a smart guy,” and “It doesn’t matter if you play well or badly — the most important thing is winning.” In football, that sentence applies on the pitch, but for top players, it also applies to their bank accounts. Those who haven’t yet found the loopholes to reduce or eliminate their need to pay taxes count among the industry’s losers.

Indeed, Ronaldo is no exception when it comes to dodging taxes. But his name, like Messi's, is the most famous. He is the most valuable brand. He’s the icon, the man who represents the gloss and sordidness of modern football in this story of professionals and their profits. The gloss of a global religion with 1.6 billion followers — fans consumed with their teams and enchanted by their demigods and by the seemingly supernatural tricks of a player like Ronaldo, which can often only be understood when seen in slow motion. But that sordidness is also named Ronaldo: that only the result counts, the ego, the success. That everything will somehow work out and that nothing really matters, at least as long as tax authorities keep playing along or can be deceived. And as long as the fans, who pay millions to finance these stars, don’t find out.

But now the entire world is about to find out. The whistleblowing platform Football Leaks provided Der Spiegel with hard drives containing 1.9 terabytes of information — the biggest trove of data in the history of the sport. The stack of files is so massive and so meaningful to so many countries that Spiegel shared the material with its partners in the European Investigative Collaboration (EIC). Since then, 60 journalists from 12 different media organizations have collaborated in their analysis of the mostly confidential documents.

They reveal how Ronaldo funneled millions of Euro to a shell company in the Caribbean until 2014. He hardly paid any taxes on that money. And as if that wasn't enough, at the end of 2014, he sold his marketing rights for the years 2015 to 2020 all at once for an additional 75 million Euro. He quickly collected the money at the end of the 2014 tax year. That was the last year that he could take advantage of a minimal tax rate in Spain. He apparently paid no taxes on the 63.5 million Euro in advance, earned he took in using this method. Today, as his lawyers have confirmed, tax investigators are on his trail.

Other professional footballers also set up repositories for their money in exotic countries. They include Pepe and Ricardo Carvalho, both of whom played on the Portuguese national team that won the European Championship this summer.

James Rodríguez, top goal scorer at the World Cup in Brazil, is also on the list. All three play or played for Real Madrid, the world’s richest club, where it's not just the player salaries that are extremely high, but also their chutzpah when it comes to paying taxes. The list of Real players who tried to be more clever than Spanish tax law apparently allows also includes a member of the world-champion German national team: Mesut Özil, who today plays for Arsenal. He may not have funneled his money to a tax haven, but a few months ago he received a tax bill from his earlier previous stop in Spain. Özil is supposed to pay two million Euro in back taxes in addition to an almost 790,000 Euro penalty, as documents from Football Leaks show.

This is not the end of the list.

Professional football today is the greatest show on earth. The measure of the biggest stars in this show is money, either in Euro or dollars. The transfer sums are growing, as are salaries and advertising revenues. Ronaldo earns 38 million Euro a year at Real and his transfer fee – the amount another team would have to pay to wrest him away from Real – is one billion Euro. Player salaries have become so astronomical that megalomania has become inherent to the sport. Why share those millions or pay taxes on them?

Football Leaks is now exposing the uglier side of these success stories: These stars apparently want to give back as little to society as possible — none at all if they can get away with it. To do so, they and their teams of advisors navigate the often murky waters of tax law. Those who don’t play this game — because they still feel a sense of responsibility to society – are likely seen as being too weak for success.

One sentence in the mountain of data stands out. It was written by Hans Erik Odegaard of Norway in december 2015, after Real Madrid signed his 16-year-old son to the team, hailing him as one of Europe’s most talented players. Spanish lawyers had calculated the effect such a tax-saving company might have on the player's marketing revenues – the kind of company that has become so common among football professionals.

But Odegaard's father had some concerns and wrote: “He will anyway earn a lot of money, so it’s also a moral question about how much effort he shall do, trying to save some tax money when other people are struggling much harder to pay their bills.”

The Football Leaks data contains several million documents, and it takes a lot of searching before you run across an email like that.

Martin Odegaard also isn’t so easy to find these days. He currently plays mostly on Real’s reserve team and has only played for the main team twice. He is reportedly unhappy in Madrid.

So what’s a day in the life of Cristiano Ronaldo worth? That’s difficult to say, but there are some clues: He can earn 1.9 million USD for six hours and 45 minutes worth of work. That’s $4,691 a minute, as revealed in an advertising contract Ronaldo’s marketing agents signed with Toyota in June 2013. Toyota covered Ronaldo's first-class airfare to the filming site where he stood in front of the cameras for three-and-a-half hours before lunch and three hours and 15 minutes afterwards – everything was precisely detailed. The carmaker was then able to use the images in its advertisements for 13 months.

For $1.9 million, however, you won’t get the world from Ronaldo. Toyota had merely secured the rights for ads in the Middle East, plus Algeria, Morocco and Afghanistan. The company would have had to pay more for global rights. Or a different one: Because Honda featured Ronaldo in its advertisements in China at the same time. According to the contract, it brought in an additional two million Euro for a one-year contract and a maximum of six hours of work in front of the camera. Additional camera time in China, in the event it became necessary, would cost 600,000 Euro more — a bargain by Ronaldo’s standards.

Football is global, which makes Ronaldo not only a sports star around the world, but also an advertising star. He earns far more than simply his premium salary at Real Madrid. In recent years, he has been the face of shampoo brand Clear, watchmaker TAG Heuer, fashion label Armani and sporting giant Nike. The US trainer giant continually releases new models bearing the legendary CR7 logo, the seven standing for Ronaldo’s Real Madrid shirt number.

The money pours in, if one believes the contracts: According to the documents, US food mega-corp Herbalife paid more than 16 million USD over a five-year period. Ronaldo received 2.25 million Euro from Portugal’s Banco Espirito Santo for three years and 300,000 Euro for a television appearance in Rome. And he received 1.1 million Euro from the airline Emirates, along with 15 first-class tickets to Dubai from anywhere in the world.

For every pair of briefs bearing the CR7 logo on the waistline, Danish underwear company JBS must pay 13 per cent of its revenues to the player. At Nike, it’s five per cent of sales on CR7 shoes. The American company brought in 51 million Euro in global revenues with CR7-branded apparel between September 2010 and August 2011, with just under 2.6 million Euro of that money going to the company that collects Ronaldo’s fees. In addition to that, Nike also pays Ronaldo a base salary of 1.6 million Euro a year, plus the industry-standard premium payments for particularly successful seasons. When, for example, he became the top scorer in the Spanish league, he received an additional 250,000 Euro.

And advertising customers continue to pay and pay. This creates the same conundrum for Ronaldo that faces all of the world's superrich: What to do with all this money? To be sure, for every Euro he earns with his image rights above 15 million per year, he is required to pay 40 cents to his employer Real Madrid. That, at least, is what his contract requires.

But he only has to step out of his door for a few hours and say something to the camera – and the next couple hundred thousand or million Euro end up in his account. It’s as easy as that. But there are complications. The Government, after all, also wants a cut of the money.

But there are advisors – image rights specialists – to take care of that, and not just for Ronaldo. The lawyers take care of everything earned by professional football players with their name, their face, their image and their autograph. Most of that revenue comes from advertising, but there are other sources too, like the stickers of players that kids collect in their Panini albums.

It’s difficult to dodge taxes on salaries paid by the club. The rules in place are quite clear, the money-paths obvious and the tax authorities tough. Image rights, though, are a different matter, and tax lawyers have become true artists when it comes to erecting the elaborate, labyrinthine structures into which the money flows.

Tax authorities are always trying to play catch-up and are often either overwhelmed by the complexity or thwarted by laws in some countries that have been made overly friendly to football. Often enough, the hunt ends before it has truly begun. If things go well for the player, the tax authorities are satisfied with a small payment. And if things go really well, the players pay nothing at all.

The model works more or less like this: Professional salaries fall into the highest tax bracket, which is more than 50 per cent in many European countries. It can be painful. Revenues generated via image rights, by contrast, aren't taxed at nearly as high a rate, if one sets up the necessary structures. To do so, players transfer their image rights to a company working on their behalf. Fees generated by those rights – standing in front of the cameras for a muesli bar or deodorant brand, for example – are then paid to that company, which only owes corporate taxes on those earnings, just like any normal company. In Ireland, a popular location for such image-rights firms, the corporate tax rate is only 12.5 per cent.

The companies that use these stars to peddle their products aren’t the only ones paying the image firms. They also receive money from the football clubs themselves. Real Madrid, for example, buys a portion of its players' image rights: In Ronaldo’s case, it is 40 per cent. In exchange, Real pays the professional players a set fee that is also taxed at the lower corporate rate.

Basically, this is how it is done in all the major European leagues. A British court even confirmed in 2000 that the practice was above board - in the case of Dutch player Dennis Bergkamp. But that doesn’t necessarily mean it is also legal in other cases. Tax authorities aren't fond of this clever division of payments because it denies the state millions in revenues. As such, professional players are often placed under investigation for possible tax evasion. There’s a fine line to be drawn, and it’s not always clear where it is to be found. Authorities probe things like whether the image rights that a club purchases from its star players are actually worth the high price paid. Is the club actually able to come close to recouping that investment through, for example, the sale of shirts or autographed memorabilia? If not, the goal is apparently that of paying a significant portion of a player's salary at the lower corporate rate. And that would be against the law.

When it comes to superstars, who earn millions for their teams through shirt sales alone, the tax authorities often take a closer look at the image firm: does it have offices and employees or is it purely a shell company? Depending on the national laws in place, that might be considered to be money earned domestically and, as such, subject to full taxation.

The greater the profit generated, the greater the risk that something can go wrong. The advantages of using image rights to make money are immense, but they come hand in hand with the risk of falling afoul of the tax authorities. One could simply avoid the practice as young Norwegian player Martin Odegaard apparently did. But if you have an agent like Jorge Mendes, you don't avoid it. You take the plunge.

Mendes is currently the world’s most successful football agent. He represents the most famous players and makes the biggest deals. He also appears to be the most audacious when it comes to tax constructs. Mendes is capable of making players dizzyingly rich. But with him, players also become gamblers — with the help of Caribbean shell companies that are kept concealed. For good reason, one can assume.

Mendes represents Spanish national team goalkeeper David de Gea and the 2014 World Cup Golden Boot winner Rodríguez, of Colombia, and Manchester United coach José Mourinho. He represents half the European champion Portuguese national team including Pepe, André Gomes and Ricardo Carvalho in addition to the young Renato Sanchez, who now plays for Bayern Munich. Most importantly, he represents Cristiano Ronaldo.

A documentary hit cinemas last year about Ronaldo’s life (200,000 USD was paid for his participation, plus a cut of revenues). The film delves into the death of Ronaldo’s father at an early age and Ronaldo talks about how Mendes is “like a father” to him: “Jorge Mendes is a part of my family.” Naturally “Big Jorge” is also the “best agent in the world,” a title that Mendes has, in fact, been honored with six successive times at the international Globe Soccer Awards.

Like Ronaldo, Mendes knows what it’s like to be poor, but also how good it can feel to have so much money that it no longer fits into the safe at home, as the football superstar says in the documentary. Both came from families that could give them little beyond the boundless ambition necessary to work their way to money, success and fame.

Mendes achieved his success as a talented salesman. First he flogged videos and then opened a bar before arranging the transfer of one of his regulars, goalkeeper Nuno Espírito Santo, to Deportivo La Coruna. Soon, he began dealing in ever-bigger names, in part because he is good at getting others to think as highly of him as he does of himself.

In one scene, he is at dinner with friends and family of Ronaldo, standing in front of the football star. Mendes begins singing his praises: “You’re a monster. That’s the best in the world, the best football player in the world … I am proud to stand next to such a man … if I didn't know you, I'd ask for an autograph.”

It’s easy to understand why footballers adore him, especially given that Mendes is better than others at getting his clients on the big-name teams and landing enormous contracts. By his own account, from 2001 to 2010, he was involved in more than half of all transfers made by top Portuguese clubs Benfica, Sporting and FC Porto. From there, he brokered players to the really big football money in England, Spain and Italy. “Nothing is impossible,” Mendes preaches in the Ronaldo film, “nothing, nothing, nothing.” He can’t even stop saying “nothing,” adding “nothing” again and again. But if nothing is impossible, then what’s possible when it comes to player taxes? That, namely, has apparently long been part of the package Mendes offers his clients: a tax model that helps top earners avoid taxes to the extent possible. Legally? Illegally? Nothing seems impossible. Nothing.

José Mourinho is a star coach rather than a star player, but when it comes to what he earns and the airs he puts on, there isn’t much of a difference. Mourinho, who today plies his trade at Manchester United, was one of the first professionals for whom Mendes established a tax-saving structure in the Caribbean. He set it up based on the same two principles that guided Mourinho in football: Losing is absolutely unacceptable and any trick that results in victory is allowed.

There’s a legendary tale about how Mourinho once got banned from attending a game against Bayern Munich and nonetheless still managed to give instructions to the coaches on the bench. The Times of London would later report that he hid in a laundry basket in order to avoid detection as he was smuggled out of the stadium following the match.

The Football Leaks documents now shed light on what the Portuguese manager's legal tricks have brought him. Spanish tax authorities recently tapped him for 4.4 million Euro: more than three million Euro in back taxes and a 1.1 million euro penalty on top.

What happened? In 2004, Mourinho switched from Porto to FC Chelsea in London. He had won everything in Porto — the Portuguese league championship and, surprisingly, even the Champions League. This set the stage for him to get the kind of major money that can’t be earned in Portugal. FC Chelsea London is a club where winning European football’s crown is not a surprise. It is expected. Russian oligarch Roman Abramovich had bought the club and he began shopping around for players with no concern for money. There were no limits.

Mourinho, too, earned a hefty salary – it is said to be around 5.3 million GBP a year. That was his regular pay, on which he had to pay full taxes consistent with his top earner status. But he also received an addition 1.5 million GBP for his image rights from Chelsea from 2004 to 2009. To be more precise, he didn’t get the money directly — instead, it went to the Caribbean, to Koper Services SA, a shell company located in the British Virgin Islands (BVI). The letterbox firm resides at Vanterpool Plaza in Road Town on the island of Tortola, which sounds far more glamorous than it actually is. The plaza is really just a yellow stuccoed, two-story building. On the ground floor is a pharmacy run by a Ms. Vanterpool, while the floor above is rented by a law firm that sets up shell companies. They are located behind the drawn curtains. If any work is actually being done here, it is surely not being done by Koper Services.

It is just a large piggy bank. Up until at least 2013, millions of Euro from Mourinho's marketing earnings flowed into the BVI-based company. To facilitate this, the coach had transferred his image rights to Koper back in 2004, when he transferred to Chelsea. The company has been in charge of his marketing ever since, and has raked in the revenues. And these revenues are conveniently taxed at the BVI corporate tax rate of, you got it, zero per cent.

But there was still a problem: Renowned brands like Adidas aren't fond of having to transfer fees to tax havens. Should the company be audited, such payments could raise the uncomfortable suspicion that the company was abetting tax evasion or financing some other dubious deals. Advertising partners expect a better address than Road Town on the island of Tortola, and in this case, that address was to be found in Ireland. Even before Koper was founded, an Irish tax accountant had established a different company in Dublin called Multi-Sports Image Management (MIM).

Ireland was the kind of European Union country – the kind of buffer – that the deal needed so that companies like Adidas and professional football clubs like Chelsea were prepared to pay for image rights. But neither the company's location nor the tax accountant were chosen at random. With its low corporate tax rate, Ireland is seen as something of a tax haven within the EU. And the same accounting office in Dublin that founded MIM also worked for “Big Jorge” Mendes, offering its services to Gestifute, the agent's primary company.

Those interested in using Mourinho for marketing purposes had to pay a fee to MIM in Ireland – and who cares what happens to the money after that? The Football Leaks documents show that MIM received a small commission: Initially it was 6.5 per cent before dropping to four per cent in 2010. A second Ireland-based company, called Polaris, got involved later – the only organization that had real personnel and did real work. The company was responsible for generating marketing deals for Mourinho, receiving 20 per cent of any earnings.

MIM and Polaris had to pay the Irish corporate tax rate of 12.5 per cent on any profits they generated, but the money they received in commissions was a tiny portion of the overall sum. The rest was sent to Koper on the British Virgin Islands where no taxes at all were due.

So far, so rich. How, though, would Mourinho one day be able to extract his money from the tax haven piggy bank? It wasn't an easy problem to solve, particularly given that nobody was supposed to learn that the shell company was even connected to Mourinho. The documents make it clear that his tax advisors were apparently concerned that the entire structure could be revealed as a vast tax evasion scheme if it became known that Mourinho's money ended up with Koper.

The beneficiaries of Koper were thus kept well hidden. Straw men stood behind the Caribbean company. And who was hiding behind them? A foundation in far-away New Zealand. The documents indicate that it was founded by Mourinho in 2008. But he isn't the beneficiary of the foundation.

It would be difficult for the scavenger hunt to lead further away from Mourinho than New Zealand. Compared to a standard game of hide-and-seek, it was quite a masterful effort at invisibility. But who in New Zealand? The foundation is called Kaitaia Trust and Mourinho's name is not listed in the commercial register. Indeed, the only name that appears is that of an Auckland-based firm that specializes in the founding of companies. The hunt, in other words, isn't over.

It is the trust's certificate of incorporation, which is also part of the Football Leaks documents, that provides the most important clue: The foundation's beneficiaries according to the certificate are “Mourinho's current wife and his children.” A further document in the data hints at who the stash held by Koper belongs to. Koper account statements from 31 December 2013 indicates that the firm owes Jose Mourinho 11,979,657 Euro, the document notes. Owes? That was apparently the trick: Mourinho trusted his marketing revenues – more than 11 million Euro – to Koper. Officially, the money didn't belong to him, but it stayed in his family, within his reach – essentially untouched in Koper accounts in Switzerland.

Things only became particularly uncomfortable for Mourinho after he transferred to Real Madrid in 2010 and then back for another stint at Chelsea in mid-2013. In July 2014, Spanish authorities began digging into the years Mourinho spent in Madrid and into his network of companies. The club had consistently withheld 10 per cent of each payment to Koper and forwarded it on to the tax office in accordance with the law. But most of the football manager's other marketing partners sent their payments to Ireland without withholding anything at all. From there, Mourinho's money – minus the standard commissions owed to MIM and Polaris – was sent to the zero-tax paradise of the British Virgin Islands.

The football manager never submitted a Spanish tax declaration for his image rights revenues. As early as June 2013, Julio Senn, partner at the tax accounting firm Senn Ferrero, began realizing that things wouldn't end well. Senn, who was once director general of Real Madrid and is today the most sought after attorney for football players with tax problems in Spain, spoke with a coworker who had been involved in Lionel Messi's tax case. The Barcelona star had based his image-rights company in Uruguay. Senn then wrote to a tax expert named Carlos Osorio, who advised Mendes, saying that it looked as though Spanish tax officials had settled upon a strategy. Only in cases where the image-rights companies belonging to football players had real personnel and real offices were they left alone. Otherwise, Senn wrote, revenues were being seen as part of a player's normal salary. And had to be taxed as such. For Mendes' clients, it was terrible news.

Senn was initially concerned about Mourinho. He hadn't yet registered his foreign holdings even though it had been required in Spain since 2012. In September 2014, the attorney was hoping that Mourinho would at least manage to avoid criminal proceedings. Mourinho was prepared to pay “whatever it takes” to avoid such a fiasco, an approach that a lawyer colleague endorsed. He believed that Mourinho wouldn't be the only loser, “we all would.” Mendes, he noted, was extremely nervous.

That was understandable considering he had set up a similar tax model for most of his clients, one in which an offshore company received revenues from image rights. If one adds up the revenues of his most important clients that ended up in the Caribbean, the total is at least 180 million Euro. Internally, Senn – who was, as of 2014, charged with extricating Mendes's players and Mourinho from the difficulties they were in – didn't hide how he felt about the Mendes model. In an email to Mendes' tax expert Osorio de Castro, who had served as an advisor for the model, he wrote: “don't forget that the structure that all of Jorge's clients have isn't the most appropriate for people who live in Spain.” Senn added that Osorio de Castro had been told many times that the tax construction was unsuited for image rights.

Senn was most explicit when it came to the acute difficulties facing Portuguese national team player Fábio Coentrao. As a client of Mendes, he also had a shell company in the Caribbean. “Gentlemen,” Senn wrote, “the structure you have set up is a serious problem for the player.”

It was also a problem for Mendes himself. “Let's hope that they (editor’s note: tax officials) don't view Jorge's company structure in Ireland as a necessary aid for the players to avoid paying taxes in Spain,” Senn wrote. Regarding Coentrao, he wrote: “It could be that circumstances that are less problematic than those we are defending against the tax authorities are seen as tax violations.”

Senn was all the more relieved – and likely surprised – when he was able to report on 3 June 2015 following negotiations with the tax officials that it looked like Mourinho would get off relatively easy. He would be spared criminal proceedings and a public trial. He would only have to pay. Koper would even be allowed to write off a few costs – and there was even a reduction for the year 2013 because Mourinho had moved from Spain to England that summer. The result was a reduction of the sum tax officials were demanding. It was, Senn concluded, still a lot of money, but in light of the extremely worrisome situation at the beginning, it was satisfactory.

Confirmation from Spanish tax officials arrived on 30 June 2015. They accused Mourinho of negligence and of concealing his image-rights revenues and made clear that he should have declared the millions he made from marketing each year and paid taxes on the sum. The tax authority determined that all of the money parked with Koper belonged to him. The state demanded a total of 5.8 million Euro: 3.3 million Euro in back taxes for his image rights and a 1.1 million Euro penalty.

Mourinho has since paid that sum. On top of that was an additional 880,000 Euro in back taxes and a 550,000 Euro penalty for another tax matter. But Senn has filed an appeal against this portion of the ruling. Now that there were no criminal charges or an embarrassing trial to fear, he sought to avoid the penalty for that issue by way of a formality: Tax officials, he argued, took too long for their investigation. Legally, such investigations can take a maximum of 365 days, but Senn claimed that it had continued for 373 days. Spanish officials have countered that the delay came as a result of foot-dragging from Mourinho's team. Mourinho had managed to avoid a large war with the authorities, but he is happy to engage in a smaller skirmish. When it comes to ambition and the desire to avoid losing at all costs, “Mister” – as his attorneys referred to him in internal mails – can hardly be beat.

Except by one.

The moneyed Footballer of the Year

There are many piggy banks in the Caribbean. The one belonging to Fábio Coentrao, based in Panama, is called Rodinn. Ricardo Carvalho's is called Alda Ventures and is in the British Virgin Islands. Pepe's Weltex Capital is likewise in BVI as is Kenalton Asset, belonging to James Rodríguez. All of them are millionaires, all of them play or played for Real and all are Mendes clients. But none of these piggy banks were ever as crammed full of money as the one called Tollin Associates. Tollin, according to the documents, belonged to Cristiano Ronaldo. This was based in Vanterpool Plaza in Road Town on the British Virgin Islands, above a pharmacy belonging to Ms. Vanterpool, before it was suddenly dissolved in early 2015.

Mendes' advisors were afraid of nothing more than the idea that Spanish tax investigators, on the search for Ronaldo's millions, could happen across this company and begin asking too many questions. Ronaldo was the brand that had to remain spotless, a name on which Mendes had staked his own success.

Ronaldo signed with Real Madrid in 2009 after his new club had paid a record transfer fee of 94 million Euro to Manchester United. Soon thereafter, on a hot day in July 2009, 80,000 fans filled Bernabéu Stadium not to watch a football match, but to bow down to their new football god. Ronaldo, who was 24 at the time and already approaching the peak of his talents, pulled on the white shirt of his new club. He juggled a ball, kissed a child and then the emblem on his breast. It was a grand production.

But half a year previously – according to the documents, which may have been back-dated – Ronaldo had already placed his name beneath a different contract. Without fans and without a spectacle. It was a contract that made the reigning football player of the year into the football earner of the year.

The six-page document guaranteed Ronaldo earnings that were initially almost as high as his Real salary – just that the majority of this money would apparently remain hidden. The contracting party was Tollin Associates Ltd.

As was standard for Mendes clients, the football idol ceded all of his image rights to the shell company. In return, Ronaldo would be entitled to all of the earnings that Tollin would make over the course of the next six years, minus minor withholdings that are hardly worth mentioning.

The Ireland-based companies MIM and Polaris were also involved. They were responsible for negotiating global sponsorship and marketing deals on behalf of Ronaldo and they took in all the money. Tollin was hidden in the background and marketing partners didn't have to do business directly with the offshore shell company.

A small amount of the money that landed in Ireland went to Ronaldo's employer Real Madrid in accordance with their contract because they, too, were able to profit from the Cristiano Ronaldo brand, so long as his marketing earnings exceeded a certain amount. MIM and Polaris also took what was owed them in the form of commissions, sometimes up to 30 per cent and thus much higher than in the case of Mourinho. But the millions of Euro that remained all went to Tollin, including the multi-million lump sum that Real had paid so that it could receive a share of Ronaldo's marketing earnings.

In total, more than 70 million Euro flowed to Tollin between 2009 and 2014 and for years, Spanish tax authorities knew nothing about Ronaldo's secret stash. It was only in his 2014 tax return – the year in which the Tollin contract expired – that some of the money made an appearance. But it was just 11.5 million Euro.

Did Ronaldo funnel the almost 60 million Euro that remained past the tax authorities?

Ronaldo, a favorite of the football gods, would appear to be the chosen one when it comes to earthly things like taxes as well. He was able to profit from the “Lex Beckham,” a law passed by the Spanish government in 2004 to attract top scientists and business leaders to the country with the help of a low tax rate. De facto, however, the rule quickly turned into an advantage for Spanish top clubs in the competition for the world's best football players.

The law bestowed foreign players like David Beckham of Britain and Cristiano Ronaldo of Portugal the status of “impatriado.” The loophole was only open to those who hadn't lived in Spain during the previous ten years and meant that those holding “impatriado” status only had to pay a tax rate of just under 25 per cent on their earnings. Ronaldo's Spanish teammates, by contrast, had to pay more than 50 per cent. The greatest gift, though, was the fact that Ronaldo only had to pay tax on money that he earned in Spain. Earnings from abroad, including marketing revenues, were of no concern to Spanish tax authorities.

The law was revoked in 2010. Argentinian star Lionel Messi was unable to benefit because he also has Spanish citizenship. But foreign players who moved to Spain by the end of 2009 were granted a transition period that expired on Jan. 1, 2015. And it was this regulation that Ronaldo and his advisors took full advantage of.

Thanks to “Lex Beckham,” Ronaldo was only liable for taxes on 20 per cent of the millions he had parked with Tollin Associates. That was the share of his marketing revenues that his lawyers estimated came from Spain – the share on which he only had to pay a 24.75 per cent tax rate. The majority of his marketing earnings, that which had been earned outside of Spain, wasn't taxed at all.

The year 2015, though, marked the end of the privilege – for Ronaldo as well. After that, like every top earner in Spain, he would be responsible for turning over roughly half of his earnings to the state – and that included sums earned outside of Spain. But Cristiano Ronaldo apparently wasn't prepared to leave that much money to the Spanish authorities. His advisors dug deep into the chest full of tax tricks – to the murky, mucky bottom.

In late December 2014, just before the transition period was set to expire, the football professional sold his image rights for the years 2015 to 2020 for almost 75 million Euro – to go with the some 75 million that had already flowed into Tollin at the lower tax rate. The buyers of the rights were two newly established shell companies on the British Virgin Islands, one called Arnel and the other Adifore, and they were again registered at Vanterpool Plaza in Road Town on the island of Tortola.

The contracts were notarized on 20 December, 2014 in Morocco. Time was of the essence: The contracts had to be finalized by the end of the year and Ronaldo at the time was playing in the FIFA Club World Cup in Morocco.

The contract with Arnel was for Ronaldo's image rights for Spain while Adifore holds his image rights for the rest of the world. On December 20 Ronaldo submitted an invoice to each of the two companies. From Arnel, he demanded 11.2 million Euro for the Spanish rights while he billed Adifore 63.5 million for the global rights. Both payments were to be made to account number 413416 at the small, exclusive private bank Mirabaud & Cie in Geneva. The money arrived just four days later.

According to two additional contracts signed just a couple of days later, the purchase price was then to be reduced by around 15 million Euro – three million less for the Spanish share and 12 million lower for the global rights. Why? It's not clear. Did Ronaldo in fact pay this money back? There is no proof of his having done so in the account documents that are part of the data trove. Ronaldo's 2014 tax return likewise only lists 11.25 million in marketing revenues from Spain.

What, though, was the reason for the hectic activity in Morocco? Ronaldo apparently wanted to take advantage of the lower, 24.75 per cent tax rate on his Spanish image rights for the years 2015 to 2020 before the impatriado rule expired. At the same time, 2014 was also the last year that he didn't have to pay taxes on his foreign marketing earnings – the global rights that had just earned him 63.5 million Euro all at once. Taken together, the tax advantage of doing so was around 35 million Euro. That's how much he would have had to pay the Spanish tax authorities had he declared it in subsequent years.

But there was also likely a second factor. Tax investigators at the time were closing in on other Mendes clients. Even as Ronaldo was able to profit from the tax benefits, his lawyers were no longer comfortable with the structures they had set up on the British Virgin Islands. They wanted the company Tollin to disappear at the end of 2014.

To sell his rights, Ronaldo needed a powerful buyer, someone who could hand over 75 million in one lump sum to pay for the marketing revenues that the player would rake in over the next six years. That person is named Peter Lim. The businessman from Singapore is worth an estimated 2.4 billion USD and has close ties with agent Mendes. And, even more important for this kind of deal, Ronaldo himself calls Lim “a good friend.” It looks as though he was behind the two British Virgin Islands companies Adifore and Arnel.

It was almost a perfect tax-saving model for Ronaldo – almost. In late June 2015, he filed his tax return for 2014. Julio Senn's team – Spain's top accountants in this game versus the tax authorities – had compiled it and they listed his earnings right down to the cent. Salary from his employer: 34,672,988.31 Euro, in accordance with his old contract. Assets: his house in Madrid (4.5 million Euro), some money in his bank accounts for the odd purchase here and there (10,799,387 Euro) and cars, including exclusive sports cars like his McLaren MP4, his Lamborghini Aventador and his Ferrari 599 (1,248,152 Euro).

Not listed in his 2014 tax return, however, and apparently of no interest to the Spanish tax authorities, were his foreign assets. His 15 homes in Portugal, his accounts at St. Galler Kantonalbank in Switzerland, Banco BPI in Portugal and Banque Internationale in Luxembourg. There was likewise no word about his account in the private bank Mirabaud in Geneva, where the 75 million from the sale of his image rights to Arnel and Adifore ended up. By the end of 2014, his deposits there amounted to more than 110 million Euro.

Ronaldo had received 63.5 million Euro of that sum from Adifore for his global image rights, apparently without paying a single Euro in taxes. Because he didn't have to? Because the law left open this gaping loophole? Or was it more of a matter of interpretation?

Whatever the case, Ronaldo's tax accountants had a difficult time deciding what they should reveal to the authorities about his marketing revenues. The day before the deadline for filing the return, the document only reflected the 11.2 million Euro that Ronaldo had received from Arnel for his Spanish image rights for the years 2015 to 2020. He was prepared to pay taxes on that sum.

But what about the Spanish marketing revenues for the years 2009 to 2014 that had ended up with Tollin? The draft said nothing about that money, although Ronaldo was required to pay taxes on it. Tollin had received 11.5 million Euro from ads involving Ronaldo in Spain. The money was ultimately included in the final draft, dated June 30, and added to the 11.2 million from the Arnel deal for a total of 22.7 million. There was no indication that the money came from a shell company based in the British Virgin Islands – in none of the declarations that he was required to submit.

The Senn Ferrero team feared the worst. They wrote to Osorio, the tax expert who worked with Mendes, that they wanted nothing to do with Ronaldo's tax model. “We didn't participate in the structure's design, implementation or monitoring,” they expressly stated. In other words, Mendes and his team were responsible. Once everything had been sent off, a Senn employee wrote to his colleagues: “Thank God we've covered our backs a million times because I can already see that this tax return will have consequences.”

And it did. An audit began at the end of 2015, initially for the years from 2011 to 2013. A tumultuous period followed for Senn Ferrero. They suddenly had to produce multiple documents as quickly as possible, including Ronaldo's contracts with Real Madrid, with his sponsors and with the Ireland-based marketing companies MIM and Polaris. The team assigned with protecting Ronaldo, led by Julio Senn, knew exactly where the weakest point in Ronaldo's tax model could be found. Tollin.

Osorio, the long-time tax expert for Mendes who had provided his expertise for the offshore model, realized it as well. The Senn team wanted to know from him who Tollin actually belonged to. The response: “The information about Tollin, the most sensitive, we have to talk about it.” A couple of days later, the Mendes accountant wrote: “Say nothing about the beneficiaries of Tollin or about the trustee without speaking to me first.”

Why was everybody so concerned when it came to Tollin?

Ronaldo was apparently lucky this time around – or enjoyed a significant amount of understanding from the Spanish tax authorities. There are, after all, agents there who are so close to people from Senn Ferrero that they don't just send emails to the lawyers from their official email accounts, but also from their private accounts. In the end, they declined to consider Ronaldo as the owner of Tollin, even though so much of his money flowed to the firm. The news put Senn Ferrero in a self-congratulatory mood: “We did it.” The officials don't view the companies “that do business with MIM, Tollin in this case,” as being owned by the players. “Thank God.”

Ultimately, the relief could prove to be premature. Thus far, the authorities have only examined Ronaldo's tax returns up until 2013. Should they decide to take a closer look at 2014, as Ronaldo's lawyers expect they will, the role played by Tollin as well as the sale of Ronaldo's image rights to the British Virgin Islands-based companies Arnel and Adifore will become apparent.

Would the authorities once again decide that nothing was askance? Would Ronaldo again get lucky? The decisive question is: Was it legal for Ronaldo to claim his image rights earnings for 2015 to 2020 in 2014, the last year he could enjoy the privileges bestowed upon him as a result of the expiring “Lex Beckham” law? And prior to that, shouldn't all of the marketing revenues generated in Spain for Tollin have been assigned to him? He was, after all, the sole beneficiary of the shell company.

All of the money collected by Tollin belongs to him according to the contract. For tax experts such as the German-Spanish lawyer Rafael Villena from Hamburg, who has spent years examining such structures, the situation is clear:

“Ronaldo should have declared all of the money paid to Tollin for each year from 2009 onwards, and not only in 2014.” And regarding the income from the years 2015 to 2020: “He should not have been allowed to declare it in 2014. I can't imagine any tax authority recognizing such a thing.”

The Munich-based lawyer Peter Duvinage, who has provided contractual consulting to show-business stars and athletes for years, agrees.

“When it comes to tax structures involving an offshore paradise like the British Virgin Islands, the alarm bells have to go off for all tax officials.”

That could have been what Julio Senn had in mind when he wrote Mendes' tax accountant Osorio de Castro on March 16, 2016: “The only good thing is that Tollin no longer existed in 2015.”

The EIC network presented the results of its reporting to stars, clubs and agencies that play a role in this story. The extensive list of questions was primarily aimed at finding out what they knew of the activities engaged in, what they had to say about the accusations leveled against them and how they assess the documents. Cristiano Ronaldo and agent Jorge Mendes declined to answer. Portuguese players Carvalho, Coentrao and Pepe as well as the Colombian Real Madrid star Rodriguez and Jose Mourinho also didn't respond. Neither did we receive a reply from billionaire Peter Lim and the Ireland-based companies MIM and Polaris.

We did, however, receive a statement from Carlos Osorio de Castro, Mendes' tax expert.

“I have nothing to do with the construction of a company structure for image rights for the players named,” he wrote. He likewise “categorically denied” all accusations and said he refuses to say anything about professional issues or clients as a matter of principle. Osorio de Castro inveighed against the “witch hunt” and said the leak stemmed from the theft of data from the tax accounting firm Senn Ferrero. The documents taken were then “distorted and manipulated,” he wrote. People from Senn Ferrero also claimed that some of the documents were forgeries, though the Spanish tax attorneys didn't want to be directly quoted.

EIC did all it could to determine the authenticity of the documents and neither Spiegel nor any of its partners came across any indication that the papers were either fakes or had been partially manipulated. In prior Spiegel articles stemming from the Football Leaks data trove, not a single document was revealed to have been falsified. Senn Ferrero and Osorio de Castro likewise declined to identify which documents they thought had been manipulated.

Real Madrid left most of the questions unanswered, justifying their reticence by noting that the data breach had been illegal. Furthermore, the club said, the data contained personal information about which the individuals involved had a right to comment and not the club. Real Madrid insisted that it consistently obeyed the applicable laws, noting that in cases where Real paid for image rights, the club always withheld the taxes due and transferred it to the state in accordance with Spanish law. Here, the club is likely referring to the ten per cent that was in fact paid to the tax office when Real paid the Irish company MIM for advertising with Ronaldo or Mourinho. That is why, the statement from Real continues, “no irregularities of any kind have ever been detected” when the club's taxes have been audited.

Former Real Madrid player Mesut Özil has appealed against the tax penalty levied against him and his lawyer declined to comment on the case. Spanish tax authorities also didn't respond to queries on this or any other case.

In England, the London-based club Chelsea insisted that it has always obeyed prevailing law when it comes to payments for image rights, including in the case of Mourinho. English tax authorities, however, declined to give the all-clear. They indicated that they won't comment on individual cases, but added: “HM Revenues and Customs carefully scrutinizes the arrangements between football clubs and their employees in respect of any image right payments to make sure the right tax is paid.”

It sounds almost like a threat, and one that Mourinho would be well advised to take seriously this time. Because in the end, it won't be journalists passing final judgment on his and the others' Caribbean adventures. It will be the judiciary.

Read more at our Football Leaks page