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Tax fraud case against Bayern Munich's Xabi Alonso dropped

Spain will not pursue a tax fraud case against Xabi Alonso.

A Spanish judge has dropped a tax fraud case against Bayern Munich midfielder Xabi Alonso.

Alonso had been under investigation by the Spanish authorities since 2014 for alleged tax evasion involving his image rights.

According to El Confidencial newspaper, a prosecutor asked a judge to investigate the 35-year-old, claiming there was evidence that Alonso had defrauded the tax office of €2 million from 2010-12.

Alonso was one of a number of players investigated by Spanish tax authorities for their use of companies created to hold and manage their image rights.

By receiving income through these companies the players can pay tax at the corporate income tax rate, which is much lower than the personal income tax rate that applies to their salaries.

Alonso sold his image rights in 2012 for €5m to an investment firm, Kardzali Comercio Servicos de Consultoria e Investimentos, based on the Portuguese island of Madeira.

Alonso, who joined Real Madrid from Liverpool in 2009 and played for the Spanish giants until June 2014 before moving to Bayern Munich, denied any wrongdoing.

A statement from the judge in a Madrid court as reported in El Confidencial stated that Alonso had fulfilled his fiscal obligations and said: "There is no concealing from the part of Mr. Alonso, with the Tax Office fully aware of the holders and the income derived from the possession of shares of Kardzali.

"We cannot see any conduct of fraud from his [Alonso's] part but only a pure and simple use of a solution he found more advantageous within the fiscal options thanks to the expertise of his advisors.

"Madeira is no way a fiscal tax haven even though it is recognised as having an advantageous tax system.

"It has become something common with elite sportsmen and there is nothing wrong with selling their image rights to a company for its exploitation with the aim of obtaining tax advantages."

Adriana Garcia is a Valencia-based football writer who covers La Liga for ESPN FC.

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