Special for Infobae of The New York Times.
Shakira rose to fame in the 2000s when she wowed the world with her expansive vocal range, global beat music, sinuous hips, and selling tens of millions of albums.
However, lately she has been involved in a multi-million dollar tax evasion case in Spain. The prosecution has accused Shakira, 45, of six counts of tax fraud for not paying 14.5 million euros in income taxes. They ask for a sentence of eight years in prison and a fine of more than 23 million euros.
Shakira has denied the allegations multiple times. Through a statement, Shakira’s representatives assured that she has returned the 14.5 million euros “that they claimed” and that she “has no tax debts with the Spanish Treasury.”
A judge from a municipality near Barcelona has approved the trial, but no date has been set. His attorneys plan to submit a defense statement in the coming weeks.
What do they accuse Shakira of?
Shakira, the Colombian pop star whose full name is Shakira Isabel Mebarak Ripoll, is accused of not paying income taxes to the Spanish government between 2012 and 2014, although she said that was a period in which she did not live in Spain. El Periódico, a Barcelona newspaper, was the first to report on the investigation.
According to court documents, prosecutors in Spain said Shakira bought a house in Barcelona in 2012 that became the main home for her, her partner, FC Barcelona defender Gerard Pique, and their son. The couple, who split earlier this year and are in the midst of a custody battle, have two sons.
In a July indictment, prosecutors claimed that Shakira spent more than half of each year in Spain between 2012 and 2014 and used a previously established “business scheme” to hide income and assets during those years. The “business network” included companies based in the United States, the British Virgin Islands, the Cayman Islands, Malta, Panama and Luxembourg, prosecutors said, with shell companies that she “used for her own benefit and profit.”
In an interview with Elle magazine, Shakira stated that she did not live in Spain during that time, but was “busy fulfilling my professional commitments around the world.”
Shakira revealed that she was on tour for much of the time in question, “so there was no way to qualify me as a resident,” she said in the Elle interview. “The tax authorities saw that she was dating a Spanish citizen and they began to salivate. It’s clear they wanted to go after that money no matter how.”
In July, Shakira turned down a plea deal. She commented in the Elle interview that going to trial “is a matter of principle.”
How does Spanish tax law work?
Spanish internal tax legislation uses three criteria to consider whether a person is a resident of a Spanish territory: physical presence, center of economic interests and the location of a spouse and children. In the case of Shakira, the determination of presence is key, confirmed Adolfo Martín Jiménez, professor of Tax Law at the University of Cádiz and expert in international taxation at Pérez-Llorca, a law firm in Madrid.
“Even if you are not present for so many days, a sporadic presence is considered presence,” explained Jiménez, adding that “there is a tendency in Spain, within the tax administration, to consider that if a person cannot prove that they are a resident in another country, then there is a presumption that he is doing something strange.”
As in the United States, Spain applies a worldwide criterion to income. Fines like the one pursued by Spanish tax authorities, 23 million euros, are based on income, Jiménez said.
How do these cases usually develop?
Shakira is not the first celebrity to become a target of the Spanish tax authorities.
Cristiano Ronaldo, the Portuguese soccer star, paid $22 million in back taxes and penalties as part of a 2018 settlement over unreported earnings from his advertising contracts. As part of the deal, Ronaldo, who played for Real Madrid for nine years, accepted a two-year prison sentence. However, Spanish law allows first-time tax offenders convicted of a financial crime to be released from jail if the sentence is two years or less.
Lionel Messi, an Argentine soccer star who played for Barcelona, was also sentenced in Spain for failing to declare some of his advertising contracts.
But the fact that Shakira has paid the taxes and an additional 1.7 million euros in interest does not mean that she is without fault. Carlos Cruzado, a tax expert and president of Gestha, the Finance Ministry technicians’ union, said prosecutors had already taken this into account as reparation when they asked for an eight-year prison sentence.
“Normally, in these cases, there is an agreement,” Cruzado said. “Surely there will be before the trial starts so that Shakira can avoid the risk of going to jail.”
The judicial process in Spain, like the US system, has two phases: a pre-trial hearing and oral arguments. Jimenez noted that there is still a chance that prosecutors will reach an agreement with Shakira’s legal team. But an agreement is usually reached before the oral arguments, Jiménez clarified, and the possibility that an agreement is reached now is “low.”
“Usually when someone decides to go to high court to stand trial, that means they think they have a strong case,” he said. “Many celebrities settle: some of them because they don’t think they have a strong case; others just want to shut everything down.”
Jimenez said that if Shakira were found guilty, she could be ordered to serve time in prison.
In the interview with Elle, Shakira indicated that the Spanish tax authorities have targeted other celebrities. “It’s her style,” she said, referring to the Spanish tax agency. “But I am confident that I have enough evidence to support my case and that justice will prevail in my favor.”