Shakira has won the latest battle she still had with the Spanish Tax Agency, which will have to return more than 60 million euros to her for penalties that, according to the court’s conclusion, were imposed on her improperly. The contentious-administrative chamber of the National Court has ruled in favor of the Colombian singer and has annulled the file that forced her to pay, between settlements and penalties, almost 55 million euros; these amounts will now have to be returned to her with interest, which according to judicial sources amounts to nine million. The ruling considers that Shakira should not have been considered a tax resident in Spain in 2011. However, the decision does not affect the criminal case for which she was already convicted, in a final judgment, for tax evasion in subsequent years, from 2012 to 2014.
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The artist has celebrated the victory and has once again attacked the Tax Agency in a triumphant press release, which omits the criminal conviction she herself accepted: “There was never any fraud, and the Administration itself could never prove otherwise, simply because it was not true,” she states about the ruling, which is limited to examining her circumstances in 2011, after her success with Waka-Waka (the song of the South Africa World Cup, where she met the then Barça footballer Gerard Piqué) and after completing her world tour Sale el Sol.
Shakira, who accepted a three-year prison sentence for tax fraud in the years 2012 to 2014 — admitted that she should have paid taxes in Spain and agreed to pay a fine of 7.3 million — presents herself, in the released note, as a victim: “After more than eight years enduring brutal public targeting, orchestrated campaigns to destroy my reputation, and sleepless nights that ended up affecting my health and my family’s well-being, the National Court has finally put things in their place.”
Although she accepted the prison sentence, partly to avoid trial, Shakira has never stopped criticizing the behavior of the Spanish Tax Agency in her case: “I have been treated as guilty (…) and my name and public figure have been used to send a threatening message to the rest of the taxpayers.” “My greatest wish,” she adds, “is that this ruling sets a precedent for the Tax Agency and serves the thousands of anonymous citizens who are abused and crushed every day by a system that presumes their guilt.”
The Tax Agency inspectors concluded that, in 2011, Shakira should already have been considered a tax resident in Spain. They signed settlement acts that resulted in her paying 24.7 million for not paying the IRPF (19.9 million in quota and another 4.7 million in interest) and another 2.6 million for not paying the Wealth Tax. These resolutions in turn led to sanctioning files for “very serious infringement,” with a 125% fine on the defrauded quota in each of the taxes. In total, between settlements and penalties, the amounts reach 54.7 million. That 2011 fiscal year, one of the most prosperous in Shakira’s career, was ultimately not part of the Prosecutor’s complaint because, criminally, the offense had expired.
163 days and a “relationship”
For a person to be considered a tax resident in Spain, they must have spent more than 183 days in the country. The Tax Agency could only prove, between accredited days and so-called “presumed” days, a total of 163, but insisted that the singer had a “sentimental relationship” with Gerard Piqué, that she had made Spain the center of her activity, and that the tax residence in the Bahamas, claimed by the singer, was an illusion.
Through lawyer José Luis Prada, Shakira appealed the administrative decision before the National Court, which has now ruled in her favor. The ruling considers that, no matter how much she had a relationship with the Catalan footballer, in 2011 “there was no marital bond” nor “family nucleus,” since there were no “minor children.” It has also not been proven that Spain was the center of the singer’s economic activity, who at that time (the Sale el Sol tour) “carried out most of her economic activity abroad.”
The court concludes that Shakira should not have paid taxes on her worldwide income in Spain in 2011. Hence, “the settlements and penalties” imposed are “contrary to law.” The ruling, which is not final — the Tax Agency will urge the State Attorney to appeal to the Supreme Court — annuls the administration’s resolutions and orders “the return of amounts” to the artist, that is, the 54.7 million euros plus interest.
According to judicial sources consulted by this newspaper, Shakira paid 27.3 million euros at the time, corresponding to the result of the tax settlements (IRPF and wealth). The penalties, which were 125% (the percentage is calculated only on the defrauded quota, not on the interest) add up to another 27.4 million and were handled differently: Shakira presented a bank guarantee that will now be canceled. To these amounts must be added the accumulated interest which, until this week, the same sources estimate at 9.2 million.
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