A Spanish court has sentenced Brazil coach Carlo Ancelotti to a one-year prison term and a 386,000 Euro ($A692,000) fine for tax fraud when he was Real Madrid manager more than a decade ago.

Spanish prosecutors accused Ancelotti of defrauding the state of 1 million euros ($A1.8 million) in 2014 and 2015. State prosecutors sought a prison sentence of up to four years and nine months on two counts of tax fraud.

In March 2024, they accused Ancelotti of having used shell companies to hide his true earnings.

Prosecutors claimed Ancelotti, for example, used one company that lacked "any real (economic) activity" in the Virgin Islands as part of an alleged scheme.

Carlos Sanchez, Ancelotti's press officer, told The Associated Press that the coach "will not make comments for now."

Brazil's soccer confederation said in a statement that it was following the case.

The Italian coach is the latest in a string of major soccer profiles to face a crackdown by Spanish authorities over unpaid taxes, although none have actually been sent to prison so far.

That list includes star players Lionel Messi and Cristiano Ronaldo, as well as Jose Mourinho, another former Madrid coach.

In Spain, a judge can suspend a sentence of less than two years for first-time offenders.

Ancelotti, who turns 67 on Thursday, is one of soccer's most successful coaches. He is the only coach to have won the Champions League five times, three with Madrid and twice with AC Milan, and the only coach to have won domestic league titles in England, Spain, Italy, Germany and France.

Ancelotti left his second stint at Real Madrid to take over Brazil's national team.