Spain accuses Shakira again of tax evasion

Spanish prosecutors have accused pop star Shakira of failing to pay €6.7 million in taxes on her 2018 income, authorities said, in Spain's latest tax charges against the Colombian singer.

The Colombian singer, during her performance at the MTV Newark Awards (USA), on September 12

Shakira is alleged to have used an offshore company based in a tax haven to avoid paying the tax, Barcelona prosecutors said in a statement.

She has been notified of the charges in Miami, where she lives, according to the statement.

Shakira will already be tried in Barcelona on November 20 in a separate case that depends on where she lived between 2012 and 2014. In that case, prosecutors allege that she failed to pay 14.5 million euros ($15.4 million) in taxes.

Prosecutors in Barcelona have alleged that the Grammy winner spent more than half of the 2012-2014 period in Spain and therefore should have paid taxes in the country, even though her official residence was in the Bahamas.

Spanish tax officials opened the latest case against Shakira last July. After reviewing evidence gathered over the past two months, prosecutors decided to file charges. No trial date was set.

The public relations firm that previously handled the affairs of Shakira, Llorente and Cuenca had no immediate comment.

Last July, he stated that the artist had “always acted in accordance with the law and following the advice of her financial advisors.”

Shakira, whose full name is Shakira Isabel Mebarak Ripoll, has been linked to Spain since she began dating retired soccer player Gerard Piqué. The couple, who have two children, lived together in Barcelona until last year, when they ended their 11-year relationship.

Over the past decade, Spanish tax authorities have cracked down on soccer stars such as Lionel Messi and Cristiano Ronaldo for not paying their taxes in full. Those players were convicted of tax evasion but avoided prison thanks to a provision that allows a judge to waive sentences of less than two years in length for first-time offenders.

The Colombian singer faces a new criminal trial two months before the trial for a 14.5 million fraud

Shakira allegedly defrauded the Treasury of another six million euros in 2018, when she was already residing in Spain, through a «network of companies» that led her to «simulate» the transfer of her rights to instrumental companies. This Tuesday, the Prosecutor's Office released the details of the second complaint against the Colombian singer, which already emerged last July. The alleged fraud this time amounts to 5.3 million for Personal Income Tax and another 700,000 euros for Wealth Tax. In just two months, Shakira will sit in the dock to face the first court case, in which she is accused of defrauding a total of 14.5 million euros. The Prosecutor's Office requests that Interpol notify the artist, who resides in the United States, of her complaint and of her summons so that she can declare that she is being investigated for two tax crimes.

The complaint recalls that, in 2018, Shakira lived in a house in Esplugues de Llobregat (Barcelona) with former Barça defender Gerard Piqué and their two children, so she had to pay all of her taxes in Spain. In the declaration for that year, however, he omitted part of his income and, in particular, the million-dollar payments obtained thanks to the El Dorado musical tour, which between June and November of that year led him to give 53 concerts in 22 countries. especially in Europe, the United States and Latin America. “Moved by the desire to pay taxes as little as possible,” Shakira Isabel Mebarak Ripoll “used a corporate framework” and deducted expenses “that were not appropriate,” according to the public ministry.

Shakira diverted that income to companies domiciled in countries where taxes are barely paid and “highly opaque.” The Prosecutor's Office also points out that these companies are purely instrumental, that is, they do not have any real activity, since they “lacked human and material resources” and their only objective is to contribute to evading the payment of taxes.

The most relevant company in this international network is AC, based in Luxembourg, which received (under a long-range contract signed with Live Nation in 2008) income from the transfer of Shakira's musical rights. Since the singer paid her taxes in Spain of her own free will (2015), she had included all the income from that company in her declaration before the Tax Agency. But in 2018 she declared only 75%, arguing that the company had “significant assets” and carried out vital functions.

None of that is true, according to the Prosecutor's Office. AC was nothing more than an “intermediate company” that “did not carry out any activity.” But the accusation goes further: the most important asset of that Luxembourg firm were Shakira's musical rights, which she had only transferred «formally» and through a series of «simulated contracts», without any real desire to transfer them. “Shakira maintained at all times,” the complaint concludes, “her full availability and dominion over her own musical rights.”

37 million for 'El Dorado'

The successful El Dorado tour earned Shakira 37 million euros (plus another 4.2 for sponsorship), which she collected through different companies and in different ways. A portion of the money (9.6) was paid by Live Nation in 2011 as an advance; However, the payment had to be contemplated in the 2018 declaration, that is, at the time of accrual, as the singer's advisors had expressly requested before the Treasury. This circumstance was “perfectly known” to Shakira, the complaint highlights.

The singer from Barranquilla obtained other income that year (from advertising, sponsorship or music rights) that led her to earn a total of 48 million euros. Machinery like the one the artist sets in motion on a tour around the world also entails considerable expenses and these were 28.4 million. But the Treasury, again, disagrees and considers that the correct figure is lower, about 21.3 million. The reason is that Shakira, according to the inspectors' conclusions, presented duplicate expenses (three million), expenses for her own musical rights that could not be deducted (another three million) and also personal and unjustified expenses (half a million euros; among others, for plane tickets in the names of his two children, Milan and Sasha). The total returns obtained in 2018, according to the Treasury, were 26.7 million, and that is the amount that had to have been included to calculate the personal income tax settlement.

Regarding the Wealth Tax, the Treasury concludes that the singer's companies have financial assets totaling 147.2 million euros and real estate (a house in Barcelona, another in the Bahamas, two in Miami, one in New York and another in Barranquilla) for 12.1 million. The statement was also not accurate on this point. The Tax Agency of Catalonia (ATC), which manages this tax, stopped paying 773,600 euros.