Spain’s former king pays tax penalty after credit card controversy

Spain's former king Juan Carlos has paid over half a million euro to his country's tax authority in the hope of bringing to a close one of several investigations into his finances.

In a statement issued via his legal team, Juan Carlos, who abdicated in 2014, said he has presented a declaration “without prior requirement” to pay off €678,392. According to reports, the amount has already been paid.

The penalty payment followed news that the former monarch, now 82, was being investigated for spending hundreds of thousands of euro using credit cards belonging to the Mexican businessman Allen Sanginés-Krause.

Juan Carlos left Spain for the United Arab Emirates in August, as controversy mounted surrounding his finances. An investigation had begun into a €65 million payment he received from the Saudi royal family in 2008 and which he subsequently paid to Corinna Larsen, a German-born businesswoman widely reported to be his former lover.

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Investigators are deciding if that money was a bribe linked to the awarding of a contract to a Spanish-led consortium to build a high-speed rail link in Saudi Arabia. However, given that the money changed hands while Juan Carlos was still king, it is thought he could avoid prosecution by claiming immunity. Another probe is looking into allegations that he hid money in tax havens.

In the separate credit card case, investigators believe that the former monarch may have spent upwards of €500,000 between 2016 and 2018 at the expense of Mr Sanginés-Krause, without declaring the transactions. The money was used to pay for travel, hotels and meals, according to El País newspaper, and could constitute tax fraud if more than €120,000 in undeclared funds was spent during any one year.

Mr Sanginés-Krause, an art collector and horse lover with a background in banking, owns Killua castle, near Clonmellon in Co Westmeath, which the former king visited in 2017.

Tarnished reputation

Juan Carlos took the throne in 1975, succeeding the dictator Francisco Franco as head of state and the young king was instrumental in leading the country towards parliamentary democracy. This earned him substantial goodwill among Spaniards although a string of scandals linked to his personal life has tarnished his reputation in recent years.

In recent days, reports of his attempts to legalise at least part of his finances have drawn speculation that the former king is planning to return to Spain soon. However, there has been no official confirmation that this is the case.

“The consequences of any wrongdoing affect us all and the principle of equality should be established, independently of political allegiance,” said José Luis Ábalos, of the Socialist Party and a government spokesman, as speculation grew this week about the former king’s attempts to settle the credit card case.

However, the leftist Podemos, the junior partner in the coalition government, was more critical of the former monarch. Party spokesman Pablo Echenique said he had "chosen to confess that he has defrauded the tax authority".

Pablo Casado, leader of the conservative opposition Popular Party (PP), instead focused on the former monarch’s achievements, highlighting “his legacy and the important work he has done for Spaniards”.