Shakira’s tax problems have been a hot topic ever since the multi-millionaire pop star was accused of evading taxes in Spain.
Singer and songwriter Shakira is currently standing trial for tax fraud in Spain. The singer appeared before a Spanish judge in Barcelona to answer charges of failing to pay more than 14.5 million euros in taxes between 2012 and 2014.
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Everything You Need To Know About Shakira’s Tax Problems
Shakira is being accused of failing to pay €14.5 million in taxes between 2012 and 2014 when she was living in Barcelona with her partner and two children.
According to Spanish authorities, Shakira should have legally resided in Spain during that period, making her liable for Spanish taxes on her income.
However, Shakira has maintained that she was never a legal resident of Spain during those years and therefore should not be held responsible for paying Spanish taxes.
In April 2021, Shakira appeared in court via video link from her home country of Colombia to answer questions regarding her tax situation.
During the hearing, it was revealed that although Shakira had registered for a social security number in Barcelona and signed a lease agreement for an apartment there, she never actually lived at the address.
There are also reports that much of her income from 2012-2014 came from activities outside of Spain; however, these claims were not discussed during the hearing.
Shakira’s Tax Problems Against the Spanish Government
In December 2019, Spanish prosecutors accused Shakira of failing to pay personal income tax during her time living in the country from 2012-2014.
According to prosecutors, the singer used a complex network of offshore companies to avoid paying taxes on more than 20 million euros earned during that period.
The case against her includes claims that she used an offshore company based in Malta to declare income generated by public performances and music sales as being earned abroad—even though she was living and working in Spain at the time.
During her court appearance, Shakira apologized for any mistakes made on her tax returns but maintained that she did not commit any fraud intentionally. Shakira claims she doesn’t owe a hefty tax bill to the Spanish government.
She also provided enough proof to support showing that she had paid all taxes due while living in Spain up until 2015 when she moved with her family back home to Colombia.
The singer argued that if there was an error on her prior returns, it was likely due to a misunderstanding or oversight rather than any deliberate attempt at avoiding taxation.
“I’ve paid everything they claimed I owed, even before they filed a lawsuit,” she said. “So as of today, I owe zero to them. And finally, I was advised by one of the four biggest tax specialist firms in the world, PricewaterhouseCoopers, a prestigious and globally recognized tax firm, so I was confident that I was doing things correctly and transparently from day one.”
Shakira claims this is all par for the course when it comes to the Spanish tax authorities and the tactics they’re using against not just her and other celebrities but the “regular taxpayer” as well.
Spain’s Tax Laws
In Spanish tax law, citizens are subject to a tax rate based on their residency status—either non-resident or resident—which can affect the amount of taxes they must pay. Non-residents are taxed at a higher rate than resident taxpayers, so individuals need to determine their residency status correctly before filing their taxes.
Under Spanish law, people who spend more than six months in the country are considered residents for tax purposes. But Shakira says Spain was not where she was mainly living at the time.
In Shakira’s case, Spanish tax authorities allege that she was a resident taxpayer during the period in question but failed to declare her income properly as such.
The Impact Of Shakira’s Tax Problems on Her Career
The ongoing trial has already had an impact on Shakira’s career; she was forced to cancel her appearance at last year’s Latin GRAMMY Awards due to the legal proceedings surrounding the case, which were scheduled for the same date as the awards ceremony.
It remains unclear how much further impact this trial may have on her career moving forward, but, likely, any potential conviction could negatively affect her popularity and influence in the music industry going forward.
In November 2022, Shakira reportedly described the Spanish government’s case as a “smear campaign” against her. The pop star claimed that she wasn’t a resident of Spain during the period in question and would only have had to pay taxes in the country if she lived there for 183 days of the year.
Instead, she paid more than $10 million in taxes to the United States, where she was being paid to appear on The Voice. According to the documents, Shakira didn’t change her tax residency to Spain until 2015.
Shakira’s tax problems have been ongoing since 2020 when Spanish authorities first filed charges against her alleging that she had failed to pay 14.5 million euros ($18 million) in taxes between 2012 and 2014.
Shakira tax problems face two counts with each count carrying a possible jail sentence of up to five years if found guilty as well as a hefty fine.
Prosecutors in Barcelona have alleged the Grammy winner spent more than half of that period in Spain and should have paid taxes in the country, even though her official residence was in the Bahamas.
Shakira, whose full name is Shakira Isabel Mebarak Ripoll, has been linked to Spain since she started dating soccer player Gerard Pique. The couple, who have two children, used to live together in Barcelona but recently ended their 11-year relationship.
Ultimately only time will tell what happens next in this ongoing tax fraud case involving one of Latin music’s biggest stars!