Juan Carlos I has fully repaid the loans he signed with a group of businessmen to settle his tax debts with the Spanish Tax Office. As EL MUNDO has learned, he has already returned an amount exceeding four million euros thanks to the income he has generated during the last years as a resident in the United Arab Emirates.
As sources close to him assure this newspaper, a part of these funds corresponds to the sale of his rights for the production of documentaries about his life as well as intermediation in commercial operations. These operations cannot be traced and verified by the Spanish Tax Agency since he is no longer a tax resident in our country.
It is worth noting that the Emeritus King made a voluntary regularization before the Tax Office in February 2021, amounting to exactly 4,395,901.96 euros, including late payment interests and surcharges. This amount, the most significant of those settled with the Tax Agency, corresponded to private trips amounting to 8 million euros that were financed through the offshore Zagatka Foundation. This entity, established in Liechtenstein, was led by his cousin Álvaro de Orleans, and concealed from the Tax Office all the expenses it covered, both during his time at Zarzuela and after the proclamation of Felipe VI.
Months before, Don Juan Carlos was obliged to make another regularization, this time amounting to 680,000 euros, for the gifts given to him by the Mexican businessman Allen Sanginés-Krause, which the Tax Office considered an unjustified increase in assets.
His legal advisors indicated that the method to pay the regularization, especially after his official allocation was withdrawn, should be through signing loans with trusted businessmen that had to be repaid on time to avoid new tax issues.
Among the options considered at that time, the donation of funds was initially ruled out, as it was subject to a 40% tax and could lead to new legal problems with the Tax Agency if considered gifts due to his status. Therefore, Don Juan Carlos agreed and signed loan agreements with a dozen businessmen and aristocrats who requested to remain anonymous.
The former Head of State could have faced a new setback if the Tax Office proved that he had signed fictitious loans. If, as sources close to him claim, he has fully repaid what he received, this risk would disappear. In the past, he was involved in a similar operation when he gifted his daughter, the Infanta Cristina de Borbón, 1.2 million euros to buy a mansion in the luxurious area of Pedralbes in Barcelona with her then-husband, Iñaki Urdangarin.
That amount was disbursed by the then Monarch after La Caixa denied a loan to his daughter and son-in-law for the purchase and renovation of the property, which amounted to around 9 million euros. The Infanta Cristina returned a small portion to her father, and the Prosecutor's Office investigated the operation in the Nóos case. It concluded that it constituted tax evasion but eventually declared it prescribed and never demanded the origin of the money from that gift.
In this way, Don Juan Carlos invoked article 305.4 of the Penal Code, which states that "the tax situation will be considered regularized when the taxpayer has fully acknowledged and paid the tax debt." However, the regularization was highly controversial because it had to be carried out before being aware of being under investigation, and the Prosecutor's Office had notified him of investigative proceedings against him, which his advisors refused to accept, causing him to never be officially informed.
He still faced another tax issue. This newspaper revealed in June 2022 that the Tax Office investigated him for gifts of hunting trips and other presents between 2014 and 2018, after his abdication. He resolved this matter by paying an administrative fine of less than 500,000 euros and decided to move his tax residence out of Spain to avoid being under the Spanish Tax Office's radar. He will continue in that situation. As reported by EL MUNDO last Sunday, the Emeritus King accepts that he will die abroad, and all parties involved are considering the hypothesis that people die where they live.