The same sentence is being sought for the player's financial adviser, Ivan Zaldua, as well as the manager of the Portuguese company he allegedly used to avoid tax.
Prosecutors accuse Alonso of defrauding tax authorities of about $2.4 million from 2010-12. Tax authorities also want the former Real Madrid and Liverpool midfielder to pay almost $6.14 million in fines.
The Madrid prosecutor's office on Wednesday said it could jail retired Spain worldwide Xabi Alonso for five years and fine him 4 million euros ($4.9 million) for alleged tax fraud related to money earned from imaging rights while at La Liga football club Real Madrid. The irregularities are related to Alonso's income from image rights.
All those accused have denied wrongdoing.
Spanish prosecutors released a statement on Wednesday to confirm that they are seeking a conviction against the ex-Spain worldwide.
The Madrid court in charge of the investigation reopened the case in 2017 and said the allegations against Mr Alonso had been "sufficiently substantiated".
He moved to Real Madrid for the start of the 2009-10 season in a deal worth around £30 million.