A dozen businessmen and friends of the king emeritus have lent him the 4,395,901.96 euros that he has paid to the Treasury to regularize the more than eight million that a foundation of his distant cousin Álvaro de Orleans paid for trips on private planes until 2018.
The benefactors of Juan Carlos I have signed loan contracts, in some cases before a notary public, to avoid legal problems. Formally, the formula chosen to raise the funds has been a personal credit, instead of the donation, since the latter would have required paying around 40% in taxes.
Juan Carlos I pays more than four million to the Treasury in a second regularization.
The collection to raise funds with which to pay the debts of the emeritus king with the Treasury began in January, according to sources familiar with the operation. The initial list of benefactors included 32 names, most of them businessmen and aristocrats, all of them from Juan Carlos I’s circle of friends. In the end, the number was reduced to a dozen, since the others did not complete the paperwork on time.
The process, the same sources add, was carried out with the maximum guarantees and legal advice, to prevent taxpayers, who have asked to remain anonymous, from having legal problems.
To channel the funds, the personal credit formula was chosen instead of the donation, although the sources consulted acknowledge that there is no desire for it to be returned. The donation would have required to pay a minimum of 34% in taxes, as there is no kinship relationship between the donor and donee, and even more than 40% depending on the patrimony of the emeritus king.
In addition, the same sources add, it could have touched the “improper bribery”, although the King’s father is not a civil servant, since the donations were made based on his status as a member of the royal family.
All loans, which have been of different amounts, according to the will and possibilities of each benefactor, have been reflected in credit agreements, some of a private nature and others before a notary public. In all of them, the interest rate (which can be 0%) and the repayment period have been stated.
This last point is the most problematic, since Juan Carlos I is 83 years old and cannot answer for a long-term loan, unless it is understood that the payment of the pending debt when he dies will be borne by his heirs.
Although no taxes are paid, the sources consulted emphasize, there is an obligation to deliver loan contracts between individuals to the Treasury, which could investigate them if it suspects that it is a fictitious loan that actually conceals a donation.
In 2004 Juan Carlos I himself made an interest-free loan of 1.2 million euros to his daughter Cristina for the purchase of a mansion in Pedralbes (Barcelona), of which he presented a public deed. In eight years he only returned 150,000 euros.
Juan Carlos I’s lawyer, Javier Sánchez-Junco, acknowledged this Friday, through a statement, that the emeritus king had presented a second tax regularization for the amount of 4,395,901.96 euros, “including late payment interest and surcharges” , as advanced by EL PAÍS.
The lawyer stressed that the supplementary statement was presented “without any prior requirement of any kind”, an essential condition for it to be able to evade an accusation for a tax offense, by exceeding the defrauded quota of 120,000 euros in a single fiscal year.
The tax debt already satisfied corresponds, according to the statement, to “the income derived from the assumption, by the Zagatka Foundation, of certain expenses for travel and services made by SM from which certain tax obligations that have been regularized could derive.” He was referring to the flights with private jets that were paid for until 2018 by the foundation of his distant cousin Álvaro de Orleans.
When the statement refers to “income”, it is confirmed that Juan Carlos I has submitted a supplementary return to personal income tax and not to the donation tax, as in his first regularization. The lawyer did not explain how much the amount not declared to the treasury, estimated at more than eight million.
“I have paid for many flights to the king emeritus, but I am not his front man,” Álvaro de Orleans told EL PAÍS in February 2020. Juan Carlos I’s cousin claimed that he did it to protect his private life and follow the family tradition of helping the Spanish monarchy.
The king emeritus, expatriate in Abu Dhabi (United Arab Emirates) since August, already paid 678,393 euros to the Treasury on December 9. So it was a matter of regularizing the funds that, between 2016 and 2018, the Mexican businessman Allen Sanginés-Krause provided him.
According to the Prosecutor’s Office, the cards that said businessman paid were used to pay the expenses of the emeritus king and his relatives, among whom the Kings were not included.