Another Real Madrid star has been accused of tax fraud by the Spanish Tax Authority
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Prosecutors believe the Croatian, whose wife Vadja is also cited in the accusation, evaded 870,728 euros ($1.03 million) in 2013 and 2014 via a shell company set up in Luxembourg.
However, that figure could rise once details of financial holdings belonging to the player in the Isle of Man are revealed to Spanish authorities.
Modric, 32, joined Madrid from Tottenham Hotspur for a reported fee of £30 million ($40 million) in 2012.
He is just the latest in a series of star players based in Spain to be accused of tax fraud on income related to image rights in the past few years.
On Tuesday, Madrid left-back Marcelo admitted to a 490,917 euro tax fraud via his image rights in 2013.
As part of Marcelo’s agreement with the authorities, the Brazilian is expected to be handed a four-month suspended sentence and a fine worth 40 percent of the defrauded amount.
Real Madrid’s all-time leading scorer Cristiano Ronaldo appeared in court in July over accusations he evaded 14.7 million euros worth of tax between 2011 and 2014.
Barcelona duo Lionel Messi and Javier Mascherano received 21-month and one-year suspended sentences respectively after being found guilty of tax fraud over their image rights in 2016.
However, five-time World Player of the Year Messi’s sentence was later replaced by a 252,000 euro fine.