Tax authorities check payments from Spanish Royal House to Ex-King

by Lorraine Williamson
tax investigations

MADRID – Spanish tax authorities want information about payments made to the emeritus King Juan Carlos I between June 2014-2018. This audit is part of the Supreme Court’s investigation into possible tax crimes committed by the ex-monarch. 

Prosecutors are investigating the bank account where King Felipe VI’s father received his annual allowance of €198,845. They want to check the payments set by the Spanish national budget correspond to withdrawals and deposits made by Juan Carlos I during that period. 

Royal officials have provided full information and answered questions from the inspectors, sources at the royal palace told El País. Furthermore, inspectors are now also trying to trace the origin of money used for small deposits into Juan Carlos’ bank account. Seemingly these were intended to pay for products in stores. 

Tax regularisation 

The reason for this last audit is two important payments made by Juan Carlos to regularise his tax situation in connection with other alleged financial irregularities. 

In December 2020, he potentially avoided criminal charges for his ties to Mexican businessman Allen Sangines-Krause by paying €678,393. As such, Krause is said to have paid Juan Carlos’ private expenses between 2016 and 2019. This money was also not declared in Spain as personal income or donation. 

Tax payments

The second payment of €4.4million related to hundreds privately paid by the Zagatka foundation. This was in the name of a cousin of Juan Carlos. Furthermore, these gifts were subject to Spanish income tax which was not paid at the time. Moreover, the money for this tax regularisation was raised by befriended entrepreneurs. Therefore, tax authorities have requested these persons justify the origin of the money paid to Juan Carlos. 

cogesa expats

Also, this second tax payment by Juan Carlos is being investigated after finding the Zagatka Foundation made significant cash payments. And, on February 24, a request for this was sent to Switzerland, where the Zagatka foundation had accounts. 

No more allowance 

In March 2020 Felipe VI stripped his father of his allowance. This was as a result of media reports of a separate Swiss investigation into a multi-million dollar donation received by a businesswoman named Corinna Larsen. Larssen reportedly had a romantic relationship with Juan Carlos and told investigators the money was a donation. 

Bribe Payments 

In June 2020, prosecutors at the Spanish Supreme Court announced an investigation into suspected bribe payments to Juan Carlos. Allegedly for helping Spanish companies win the contract to build the AVE high-speed rail line to Mecca in Saudi Arabia. 

Property in London 

Furthermore, Spanish prosecutors are investigating a London property apparently donated to Juan Carlos by the Sultan of Oman. Renovation work on the apartment ended in August 2015 and the property was sold for approximately €50million. However, the former King of Spain never lived there. Therefore, investigators are now trying to determine whether he received any money from the sale. 

Abu Dhabi 

On May 27, 2019, Juan Carlos dropped all official activities and withdrew from public life. Then, in August 2020, he secretly left Spain following the growing series of financial scandals tarnishing his image. Initially, his whereabouts remained unknown until it was revealed he was in the United Arab Emirates. Then, he was under the protection of Mohammed bin Zayed (popularly known as MBZ), the Crown Prince of Abu Dhabi. 

From acclaimed to maligned 

Juan Carlos sat on the throne for 39 years.  And is widely acclaimed for helping to end the February 23, 1981 coup attempt in Spain. Also for starting the transition from dictatorship to democracy after Franco’s death. However, in 2014, he abdicated due to waning popularity fuelled in part by a corruption scandal involving his son-in-law and a luxury safari vacation that revealed his relationship with Corinna Larsen. 

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