Football superstar Cristiano Ronaldo has demanded a new contract from Real Madrid for a staggering £25million a year as the Spanish government prepares to hike up taxes in an effort to raise much needed funds.
Ronaldo is currently on £9.6 million a year taking home £7.2 million after tax, under the Spanish governments new tax boundaries due to be implemented in 2013 his tax rate will jump from 24% to 52%. Because of this the player is demanding that he wants to take home £12 million a year after tax. Even under the current tax rate that would mean he would need to be paid £14.5 million a year. Once the new tax rates take affect that figure would have to rise to a staggering £25 million or the equivalent of £480,000 a week!
The Football clubs leaders have baulked at the figures Ronaldo has been suggesting especially with UEFA’s new monetary fair play rules due to take effect in 2014. Madrid’s leaders have hinted that they will not agree to his demands stating that they see Ronaldo’s stance as “provocative, in a period of mass unemployment and austerity in Spain.”
At a time when most Spanish citizens are struggling to make ends meet and unemployment continues to surpass the terrible level of 25% it beggars belief that a footballer would ask for such vast sums of cash. (Then again, maybe it doesn’t).
Ronaldo said: “I am sad and the people at the club know about it. That is why I don’t celebrate goals. It’s about professional issues. I can’t say any more.”
The proposed tax hikes will also affect expats. Already the cost of flights have sky-rocketed due to the imposition of a 50% increase to landing fees, a VAT increase from 18% to 21% and a rise from 8% to 10% for the lower tax category.
Some services are being moved up to the top rate of tax to 21%, up from 8% which is nearly a tripling of the tax. These include glasses and contact lenses, cinema, hairdressers, discos, theatre, health products including gyms, and yoga studios, funerals and cleaning services.
Cristóbal Montoro, the Minister for Hacienda and Public Administration, confirmed that in 2013 the tax deduction for a primary residence will be cancelled, and the VAT which is charged on house sales will go from 4% to 10%.
Already tax rises from 4% to 10% are impacting more than 25 million properties in Spain and has been a key cause for many UK expats to cut their losses and head home. The rises are supposed to be temporary, applying only to 2012 and 2013, but the mood in Spain is gloomy with no end in sight to the years of austerity and economic pain.
If you can afford to tough it out then maybe there will be a light at the end of the dark austerity tax filled tunnel?