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Tags Current Affairs

Spain monarch’s tax debt controversy

Date: 03 March 2021 Tags: Miscellaneous

Issue

Spain’s ex-monarch Juan Carlos I has been accused of making a payment of close to 4.4 million Euros to the country’s tax agency to try and prevent from being sued over his dues.

 

Background

The Spanish royal has seen his public image erode significantly in recent years, and had abdicated in 2014 to hand over the throne to his son, the current ruler King Felipe VI.

 

Details

  • The voluntary tax settlement worth 4.4 million Euros was related to travel and other expenses paid by a foundation from which the ex-king benefitted.

  • The foundation belonged to a distant cousin of Juan Carlos, and reportedly paid for private jet flights worth 8 million Euros– counted as part of the former ruler’s taxable income.

  • This payment meant an admission of fraud by the former king, but saved him from being charged for money laundering.

 

Other controversies

  • The king was held in high regard for protecting Spain’s young democracy after the death of dictator Francisco Franco in 1975 but saw his popularity decline due to a series of scandals involving the royal family.

  • He undertook a controversial elephant-hunting trip to Africa in 2012, a time when Spain was reeling under economic distress.

  • His image also took a blow after reports emerged of an alleged extra-marital relationship. These events are said to have led him to abdicate in 2014, giving the throne to son Felipe.

 

Consequences

  • King Felipe VI renounced inheritance from Juan Carlos after the Saudi Arabia scandal broke, and stripped his father’s annual palace allowance of around 200,000 Euros.

  • As head of state, Juan Carlos previously enjoyed immunity, but after abdication can potentially face prosecution.

  • The former king’s alleged financial impropriety is said to drive a wedge between Spain’s coalition government.

  • Currently, the Socialists are sharing power with Podemos, a hard-left party that openly opposes the monarchy.

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