Spain’s Tax Agency has asked Royal Household employees for information on all payments made to former monarch Juan Carlos I between June 2014 and 2018, sources familiar with the investigation told EL PAÍS.
The audit is part of a Supreme Court probe into potential tax crimes. Prosecutors are investigating the bank account where the father of King Felipe VI used to receive his annual stipend of €198,845, to check whether the payments established by Spain’s national budget match up with the deposits and withdrawals made by Juan Carlos I during that period. Sources at La Zarzuela, the royal residence, told this newspaper that employees have already provided the relevant information and answered questions from tax inspectors.
Tax authorities are also probing deposits that Royal Household employees made into Juan Carlos’ bank account at his request. Sources close to the former head of state said that they were “small amounts meant to pay for items at stores.” Inspectors are now trying to trace the origin of the money that was used to make those payments.
This latest audit comes on the back of two significant payments made by Juan Carlos in recent times to regularize his tax situation in connection with other alleged financial irregularities. In December 2020 he paid €678,393 in order to avoid a potential criminal prosecution over his ties to Mexican businessman Allen Sangines-Krause, who allegedly paid for the ex-monarch’s private expenses between 2016 and 2019, using money that was not declared in Spain either as personal income or as a donation.
The second time he paid €4.4 million in connection with hundreds of private flights that were paid by a foundation named Zagatka and owned by Álvaro de Orleans, a cousin of Juan Carlos. These non-cash gifts were still subject to Spanish income tax that was not paid at the time. The funds for this tax regularization were raised among entrepreneurs who are personal friends of the ex-king, and these individuals have been asked by Spain’s Tax Agency to justify the origin of their contributions, according to a source familiar with the case.
Supreme Court prosecutor Juan Ignacio Campos is probing this second tax payment by Juan Carlos after determining that the Zagatka foundation made sizable cash payments. On February 24 he sent a request for information to Switzerland, where the foundation had accounts.
Felipe VI stripped his father of his allowance in March 2020, following media reports of a separate Swiss investigation into a multi-million-euro donation received by a businesswoman named Corinna Larsen, reported to have been romantically involved with Juan Carlos. Larsen told investigators that the money was a donation from the former Spanish monarch. In June of that year, prosecutors at Spain’s Supreme Court announced an investigation into suspected kickback payments for Juan Carlos for helping Spanish companies secure the contract to build the AVE high-speed rail link to Mecca in Saudi Arabia.
Spanish prosecutors are also investigating a London property that was allegedly gifted to Juan Carlos by the sultan of Oman. Reform work on the apartment ended in August 2015 and the property was sold for around €50 million. Spain’s former king never occupied it, but investigators are trying to determine whether he received any amount from the sale.
On May 27, 2019 Juan Carlos dropped all official activities and retired from public life. On August 3, 2020 he secretly left Spain in the wake of the growing series of financial scandals affecting his image. His whereabouts remained unknown until it emerged that he was in the United Arab Emirates, living under the protection of Mohammed bin Zayed (colloquially known as MBZ), the crown prince of Abu Dhabi.
Juan Carlos, who served on the throne for 39 years and is widely credited with helping stop the February 23, 1981 coup attempt in Spain, abdicated the throne in 2014 due to waning popularity fueled in part by a corruption scandal involving his son-in-law and by a hunting trip during which his relationship with Corinna Larsen emerged.
English version by Susana Urra.