Ex king pays €4m in second tax regularisation

MadridSecond attempt by Juan Carlos I to evade a tax crime. After last December he paid the Treasury €678,393 to avoid a tax investigation into his use of opaque cards, he has now completed a second regularisation for a much higher value: more than four million euros, according to El País, who cites sources familiar with the operation. The total of undeclared money stands at over €8m for gifts in kind from a foundation that also affects Felipe VI. The payment is part of a voluntary statement carried out by lawyers for the ex king, who fled to Abu Dhabi.

Juan Carlos I received around €8m in flights from a private jet company, paid until 2018 by the Zagatka foundation, which was owned by his distant cousin Álvaro de Orléans. Receiving this type of gift is considered a payment in kind that would have to be taxed. Established in 2003 with headquarters in Liechenstein, Zagatka's founding objective was to contribute to the recognition of the contribution of the then head of state to Spanish democracy.

But its business did not concern only Juan Carlos I. Felipe VI appeared as a beneficiary, as well as his father, until November last year, when Swiss prosecutors closed in on the royals. It was precisely because of these links that the current monarch punished his father almost a year ago when, on the same day as the state of alarm came into force in Spain, he announced that he was renouncing any kind of inheritance from his father and withdrew his allowance.

In fact, the Zagatka foundation had until recently amongst its objectives "to ensure financial assistance to the family of the founder". And the amount accumulated until last year was not small: €10m, more than what Juan Carlos I has now paid to the Treasury. According to the distant cousin of the emeritus, the only objective was to protect the private life of the royal family but in no case to act as a front man, as he pointed out to the Swiss prosecutor investigating the shady business of Juan Carlos I.

The investigation of the Prosecutor's Office

Now we will have to see how the Prosecutor's Office responds to this new regularisation. Last December, when the king first regularised assets, the Prosecutor warned that he would investigate "the spontaneity, veracity and completeness" of the declaration, but this investigation has not had any results so far, nor have any of the other investigations being carried out by Prosecutor's Office.

The law establishes that any citizen can present a voluntary statement, as long as the Tax Agency has not denounced him or her or they have filed a complaint. Doing so is not considered admitting tax fraud, because it could be that there was an honest mistake was made and Hacienda rewards the payment of taxes. However, since February 2019, the doctrine of the Supreme requires that the payment is made before the affected knows they are under investigation.

According to El País, if Juan Carlos I has taken so long to pay the Treasury again it is because he had difficulty getting the money, which adds uncertainty about the origin of the money and also a key article of the Criminal Code, 305.4, which requires that any regularisation be "complete and truthful" for the tax authorities and the Prosecutor's Office to consider it correct. The fact of filing two in a row could be an indication that the first one was not complete.

In total, Juan Carlos I has three lines of investigation open in the Supreme Court's prosecutor's office. The first for the collection of illegal commissions in the works of the AVE to Mecca, which were the first case that put Juan Carlos I in the target. The second, for the use of opaque cards from a Mexican businessman both by him and also by Queen Sofia and some of his grandchildren. And the last one, for money laundering through different companies.