Spanish tax authorities ‘chasing $1.6MN from new Real Madrid boss Ancelotti’s salary over company set up while he was at Chelsea’

Newly-appointed Real Madrid manager Carlo Ancelotti faces around $1.6 million being seized from his salary by tax authorities over alleged crimes relating to his first spell in charge of the club, according to reports in Spain.

The Special Delegation of Finance in Madrid contacted Real Madrid within 48 hours of the former Everton manager being reappointed as head coach at the Bernabeu, a report that has shown purported documents from the case has said.

Revered Italian Ancelotti, who won the Champions League with the club in 2014 and had lifted the title twice previously with Milan, will have to testify on tax offenses on July 23, according to El Mundo.

That could see the 62-year-old follow in the footsteps of stars including Lionel Messi, Cristiano Ronaldo and Diego Costa by appearing in court on tax charges, with his debt said to relate to a failure to correctly declare income from Madrid and his image rights when he lived in Spain between 2013 and 2015.

Ancelotti reportedly created an English company during his previous role in charge at Chelsea that allowed him to channel his earnings, paying 10 per cent tax rather than the 45 per cent required under Spanish tax regulations.

The Public Ministry is said to be arguing that Ancelotti acted "with the intention of unjustifiably evading his obligations to the public treasury."

The well-traveled former Juventus, Bayern Munich and Napoli boss has the option to pay the tax debt and a corresponding fine or make a counter challenge through a court trial, which can risk a custodial sentence in the most extreme of cases.

The outlet said that the treasury has demanded that all of Ancelotti's income should be made available to settle the issue.

“It is an ongoing dispute," Ancelotti said in a press conference while he was leading the Toffees in the Premier League last year, adding that he was "not so worried".

"A lot of players and a lot of managers have had the same problem in Spain. I leave it in hands of my lawyers. They are the experts."

Ancelotti's abrupt restoration as Madrid boss earlier this month, replacing Zinedine Zidane, was widely seen as a surprise after he guided Everton to a tenth-placed finish in the English top flight in his first season in charge.