Carlo Ancelotti has claimed that he is ‘innocent’ after being charged on two counts of defrauding the Spanish Treasury which took place during his first spell at Real Madrid between 2013 and 2015.

The current Los Blancos head coach is reportedly facing a prison sentence of four years and nine months after allegedly failing to pay a combined tax of over £854,000 (€1million) on his image rights while declaring himself as a Spanish tax resident. 

The prosecutors’ official statement with the announcement of the charges alleged that the 64-year-old set up a ‘complex’ and ‘confusing’ network of trusts and companies that allowed the money earnt from his image rights to be domiciled outside of Spain. 

But the former AC Milan manager is believed to have rejected the claims after his side’s Champions League draw with RB Leipzig on Wednesday evening. 

Carlo Ancelotti stressed his innocence after Real Madrid’s clash with RB Leipzig on Wednesday

The manager has been charged on two counts of defrauding the Treasury during his first spell in Spain (pictured in 2014 with then-assistant coach Zinedine Zidane)

‘One thing that impresses me because we are talking about a declaration from 2015,’ Ancelotti told Sky Sport Italia. 

‘They think I was a resident of Madrid, but I was not a resident here. I have already paid the fine, the money has been paid into the accounts of the tax inspectorate and the parties are talking to find a solution. 

‘I am convinced that I am innocent, I did not reside in Madrid in 2015. For them I was resident here, we will see what the judge decides.’

Ancelotti is claimed to have ‘omitted all income corresponding to the exploitation of his image rights’ when filing his self-assessed tax declarations, which in 2014 amounted to £1.1m (€1.2m), and £2.5m (€2.9m) in the 2015 financial year. 

This is turn, prosecutors believe, amounted to tax bills totalling £33,813 (€39,575) in the first financial year, and £577,340 (€675,718) in the second. 

But even if Ancelotti was to be found guilty, he could yet avoid a lengthy custodial stay. 

On the pitch, Vinicius Jnr’s second-half goal was enough to send Real through to the quarters

The side had claimed a slim 1-0 advantage in the first-leg and progressed on a 2-1 aggregate

Should the sentence be reduced to less than two years by the judge presiding over the case, the former Chelsea manager would be able to serve it as a suspended sentence, due to his being a first-time offender for a financial crime.

While Ancelotti was forced to defend the decade-old revelation after the final whistle, Wednesday evening’s result will have brought some comfort, after Real Madrid snuck past their Bundesliga opponents to book their place in the competition’s quarter-finals. 

Willi Orban provided the equaliser at the Bernabeu just three minutes after Vinicius Jnr opened the scoring in the 65th minute and the teams stayed deadlocked at full-time, but Real’s slim 1-0 first-leg victory saw the second-leg hosts progress on with a 2-1 aggregate win.