FOOTBALL LEAKS Massive tax fraud of Luka Modrić’s agents Vladica Lemić and Pedja Mijatović

The Balkan hideaway for millions in fees from contracts for the Best FIFA Men’s Player 2018. Millions of Euros in fees for the business of Belgium-based Vladica Lemić – the agent of Luka Modrić – were paid to a company in Bosnia & Herzegovina, owned by his younger brother Zoran Lemić. Corporate tax in Bosnia & Herzegovina is only ten per cent, half of the EU average. Lemić is also involved in a backdated contract in a player transfer to evade the FIFA ban on Third-Party Ownership in 2015



“A typical case of tax fraud”

As Vladica Lemić’s permanent address during all these years is in Belgium, he is a Belgian tax resident. Also the company reINA, owned by Vladica Lemić and managed by him from May 2010 to January 2018, is registered in Belgium. Since 2014 it has lost many agent fees worth millions of euros which were arranged by its owner and manager Vladica Lemić, for the benefit of another company Top Sports Consulting, owned by his brother Zoran. Documents reveal that Vladica Lemić was working for free and without any payments from the football clubs, to allow his brother’s company to profit. This is not allowed by law. Millions in taxes were lost to Belgium because these contracts shifted profits abroad, in what appears to be tax fraud.

If we only take into account the contracts Luka Modrić and Nikola Vujnović signed with Top Sports Consulting, worth €4.4 million combined, the potential tax loss for Belgium budget is €1.5 million.

But if Vladica Lemić had a similar leading and managing role also in other contracts signed by his younger brother, what is highly possible, then tax evasion may be much higher.

Lawyer of Belgian firm Bloom Law Denis-Emmanuel Philippe, tax professor at University of Liège, analyzed anonymized findings and calculations of this investigation and confirmed this might be a tax fraud.

“In principle, if the consultancy services have been rendered out of Belgium by Company X (through its director, older Brother A), the consultancy fees would need to be taxable in Belgium at the corporate income tax rate of 33,99% at the level of Company X,” he wrote.

“In the case at hand, the question arises whether the profits derived from the consultancy services have been artificially shifted to a low-tax country, i.e. Company Y in Bosnia. Such would be the case if the key people, which create the added value with respect to the consultancy services rendered, i.e. Brother A, is a Belgian tax resident and performs the services out of Belgium.

According to Belgian tax law, contractual arrangements agreed between related parties (between Brothers A and B) should reflect economic reality. If this condition is not fulfilled, the Belgian tax authorities could try to challenge such a profit shifting, by invoking several anti-abuse provisions which aim at combating artificial profit shifting,” Philippe explained.

“Such a situation is a typical case of tax fraud: reality does not match with the contractual arrangements. If Brother A performs the major part of the consultancy services, while it is the company Y of Brother B (which is tax resident in Bosnia) which issues the invoices for the services performed by Brother A with a view to benefit from a low corporate income tax rate, this could be a case of tax fraud. If there is a tax fraud, criminal sanctions are also not to be excluded,” said the Belgian tax expert.

Phillippe also added “it is said to be a sham where the parties make an apparent deed whose effects they agree to change or eliminate by use of another deed that remains secret (a sham transaction). In that case, there is only one real agreement, the secret one. This “sham” or “simulation” constitutes a “tax fraud”. And this cannot be confused with the legal choice of the least taxed route.”

Another Belgian lawyer and professor at the Vrije Universiteit Brussel Michele Maus, who is a specialist in tax law and tax fraud, analyzed same findings.

“As far as I’m concerned this could be a case of illegal profit shifting and tax fraud, but then only if it seems that Bosnian company Y in reality did not do any consultancy activity towards Belgian company X. In that case the whole invoice scheme seems to be a tax fraud. If otherwise there are some consultancy activities done by Bosnian company Y, then it should be examined whether the invoice amount is “at arms length”, this means reasonable according to market standards. If it seems that the invoice amount is totally exaggerated, then this can be considered tax fraud as well.”
Also a third Belgian lawyer and professor at Université Libre de Bruxelles, who wishes to remain anonymous, thinks this might be possible tax evasion and tax fraud “if the clients [football clubs] signed agreements with a Bosnian company, which has no real activity or when the real work is essentially realized in Belgium.”

Brothers Vladica and Zoran Lemić didn’t respond to any of detailed questions sent by Nacional. Predrag Pedja Mijatović didn’t respond either, nor did Real Madrid and Villarreal.


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