The Arsenal striker confirmed in court via a video link that he cheated the Spanish taxman out of almost £900,000 during his spell at Barcelona.
Spanish prosecutors said Sanchez, 28, avoided paying tax by “simulating” the transfer of his image rights to Numidia, an offshore shell company in Malta.
The Chilean is said to have hidden the existence of Numidia, which he owned a 99 per cent stake in, to avoid paying €587,677 (£516,190) in 2012 and €395,766 (£347,624) in 2013.
He has already paid back the full amount to tax authorities.
But Sanchez will also have to pay a mega-money fine – in order to avoid a high-profile court case, similar that of Lionel Messi.
The frontman’s lawyers will meet with Spanish officials to agree on a figure, which is likely to be inflated by Sanchez’s delay in admitting to the crimes.
He will also be given a prison sentence – but is unlikely to serve any time behind bars.
Sanchez is the fifth player from Barcelona to be investigated in Spain for tax offences, after Lionel Messi, Javier Mascherano, Adriano and Samuel Eto’o.
Messi was sentenced to 21 months in prison while Mascherano was sentenced to a year.
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