Shakedown for Shakira? Spain Announces Second Tax Probe

tax fraudThere are a number of celebrities in the U.S. who have paid the price for tax evasion and tax fraud, including Martha Stewart, Willie Nelson, Alex Baldwin, and Nicolas Cage (with Hunter Biden’s eventual fate still in the offing). It seems that the rich and famous in Spain also raise the ire of tax authorities when trying to avoid paying their fair share.


Shakira, the Columbian singer and pop star, is in trouble once again with the Agencia Estatal de Administración Tributaria—the Spanish Tax Administration Agency—for failure to pay taxes on income earned between 2012 and 2014.


Prosecutors in the case state that Shakira purchased a home in Barcelona in 2012. Furthermore, they maintain that this became the primary residence for Shakira and her partner, FC Barcelona defender Gerard Piqué, and their son. The couple have two children together but split earlier this year and are currently in a heated custody battle.


In the meantime, she faces a multi-million dollar tax evasion charge including six counts of tax fraud for failure to pay 14.5 million euros (nearly $16,000,000 USD) in income taxes. If convicted, she could face a fine of up to 23 million euros and a prison sentence of up to eight years.


Shakira denies the charge. Her representatives state that she had already repaid the 14.5 million euros and that she has “no debts with the Spanish Treasury.”


What was Shakira’s legal residence during the time in question? She claims that she was on tour for most of 2012-2014. In an interview with Elle Magazine, she said she was “busy fulfilling my professional commitments around the world” and there was “there was no way I qualified as a resident.” From her point of view, the Spanish authorities saw she was dating a Spanish citizen and “wanted to go after that money no matter what.”


Under Spanish law, a person is considered a resident of Spanish territory if:

  • They have a physical presence
  • It is the center of economic interests
  • It is the location of a spouse and children


According to Martín Jiménez, a professor of tax law at the University of Cádiz and an international taxation expert at Pérez-Llorca, a law firm in Madrid, determining presence will be a key factor in the case. He added that “there’s a tendency in Spain, within the tax administration, to consider if a person is not able to prove they are resident in another country, then there’s a presumption that they are doing something strange.”


In the indictment, the prosecution states that in addition to spending more than half her time in Spain, Shakira hid her assets and income earned between 2012 and 2014 behind a “corporate framework” and that she used shell companies in the U.S., British Virgin Islands, Cayman Islands, Malta, Panama, and Luxembourg for “her own profit and benefit.”


Shakira is not the first celebrity to have been caught in a net by the Spanish tax authority: Portuguese soccer star Cristiano Ronaldo paid $22 million in back taxes and fines for undeclared advertising contract earnings, as did Barcelona soccer star Lionel Messi.


Shakira’s trial date is expected to be announced shortly. According to Mr. Cruzado: “Normally in these cases, there is an agreement.” Surely, there will be before the trial starts so Shakira can avoid the risk of going to prison.”


If you are being charged with tax evasion, reach out to our experienced tax attorneys

With offices in Chicago and Cleveland, the tax group at Robert J. Fedor, Esq., LLC is well-positioned to provide vigorous defense to local and international clients. For more information, contact our office online or call us at 800-579-0997.


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