He will appear at the City of Westminster Magistrates' Court on February 11 charged with two counts of "cheating the public revenue".
Mandaric, 71, was arrested with former Portsmouth manager Harry Redknapp and three other men in November 2007 as part of an inquiry by fraud detectives to root out alleged corruption in football. Both Mandaric and Redknapp, who has not been charged, have strenuously denied any wrongdoing.
The charges against Mandaric relate to the alleged payment of 295,000 US dollars (£183,000) to another person via a bank account in Monaco, evading the tax and national insurance contributions due between April 1, 2002 and November 28, 2007, the Crown Prosecution Service said.
Mandaric issued a statement on Leicester's official club website, which read: "I am surprised and very disappointed that I have been charged by HMRC.
"This was a personal matter and nothing to do with football. I have done nothing wrong and independent tax experts have already confirmed that, in their opinion, there is no tax liability.
"My solicitors, Cartwright King, will be assisting me to vigorously defend the case when it goes to court and prove that I am innocent of this allegation."
Mandaric was chairman of Portsmouth from 1998 to 2006. He completed his takeover of Leicester in February 2007.