Ronaldo’s Madrid problem is tax

Cristiano Ronaldo’s problems at Real Madrid stem from a massive tax hike on his earnings he faces in 2016.

Ronaldo’s statement after Sunday’s game with Valencia that he was unhappy at the Santiago Bernabeu appeared to indicate the former Manchester United man could be seeking pastures new.

However, a report in El Mundo claims Ronaldo feels he is entitled to better pay after scoring 150 goals in 149 games for Los Blancos, particularly since if he signs a new contract he will be subject to more tax in four years’ time.

It is understood the Portuguese international currently earns just under €15m per year gross, and just over €10m net, a figure he would like increased to around €14m or €16m net, to offset the extra money he will lose to the state if he extends his current agreement, which expires in 2015.

It has all to do with what is commonly referred to as the Ley Beckham, or Beckham Law, a rule that reduces to 24 per cent the contribution rate for salaries over €600,000-a-year in the first six years of contract.

After arriving in Spain in summer 2009 Ronaldo is still in that bracket, with the club understood to be paying the Hacienda tax authorities around €2.4m-€3.4m a season.

Nonetheless, the problem lies with the fact that in 2016 this rate rises dramatically to 52 per cent, meaning a total of approximately €7.8m would be paid into the state’s coffers.

If Ronaldo's reported wish for a €14m-€16m net wage is met, then the club would have to pay a pre-tax annual salary of around €30m.

The threat of this amount is something that concerns the Madrid board and especially President Florentino Perez, given there is no guarantee Ronaldo will be performing at the same level in the future that he has been doing for the past few years.

Tags Cristiano Ronaldo