The Madrid prosecutor's office is accusing the 65-year-old Italian Carlo Ancelotti of failing to declare income from image rights in 2014 and 2015 amounting to 1 million euros.
According to the Spanish newspaper Marca, the prosecutor is seeking a prison sentence of four years and nine months.
At the start of the court proceedings in Madrid, Ancelotti denies any wrongdoing.
I have never considered committing fraud, says Ancelotti according to the news agency AFP.
According to AFP, the football coach says that the payment system was proposed by Real Madrid, that all players have the same arrangement, just like his predecessor José Mourinho.
In 2014 and 2015, Ancelotti was the coach of Real Madrid for the first time (he returned in 2021) and the prosecutor accuses him of only declaring his salary from Real Madrid as income in his tax returns.
Furthermore, the prosecutor accuses the Italian of setting up a "confusing" and "complicated" system of shell companies to conceal his additional income from his image rights, as well as from other sources such as real estate.
The iconic coach has won three Champions League titles, three league titles, and two Spanish cup titles with Real Madrid.