Shakira's multi-million Euro tax fraud case, explained

Shakira has struck a last-minute settlement deal on the opening day of her tax fraud trial in Barcelona.

The Colombian pop star agreed to a suspended three-year sentence and €7.3m fine (£6.4m), but will pay an additional fine of €432,000 (£378,000) in exchange for having her sentence waived.

Prosecutors said in July that they would seek a prison sentence of eight years and two months and a €23.8m (£20.8m) fine if she were found guilty at trial.

Shakira has maintained her innocence since the charges were brought against her, but said she settled “with the best interest of my kids at heart”.

What was Shakira accused of?

The singer faced six counts of failing to pay the Spanish government €14.5m (£12.7m) in taxes between 2012 and 2014.

The case hinged on where Shakira lived during that period. Under Spanish law, people who spend more than six months in the country in a year are considered residents for tax purposes.

Prosecutors in Barcelona have alleged she spent more than half of that time in Spain and therefore should have paid taxes on her worldwide income in the country even though her official residence was still in the Bahamas, where tax rates are much lower.

In July, prosecutors issued a document claiming she bought a house in Barcelona in 2012, which became a family home for her and her partner at the time, former Barcelona defender Gerard Piqué.

Shakira’s defence team said she had not spent more than 60 days a year inside the country during the period in question. They argued that she was away from Barcelona for long stretches on a world tour and then spent a lot of time in the United States as part of a jury for the NBC television music talent show The Voice.

The singer established her fiscal residency in Spain in 2014 at the same time her oldest child was enrolled in school in Barcelona, according to her defence team, as she was going to spend more time in the country with her family.

Despite this case being settled, Shakira’s troubles with Spain’s tax office are not over.

In a separate investigation, Spanish state prosecutors charged Shakira in September with alleged evasion of €6.7m in tax on her 2018 income. They accused her of using an offshore company based in a tax haven to avoid paying.

Spain has cracked down on footballers such as Lionel Messi and Cristiano Ronaldo over the past decade for not paying their full taxes. The former Barcelona and Real Madrid stars were found guilty of evasion but both avoided prison time after their sentences were suspended.

Shakira’s former husband, Piqué, was fined €2.1m (£1.8m) by the Spanish national court in 2019 for evading tax between 2008 and 2010.

The couple lived together in Barcelona before ending their 11-year relationship last year. Since then, she has resided in Miami.

What has Shakira said?

Shakira put out a statement saying she had wanted to fight the charges but put her family, career and peace of mind first.

She previously rejected a deal offered by prosecutors in July 2022, instead opting to go to trial. The details of that potential deal were not made public.

“Throughout my career, I have always strived to do what’s right and set a positive example for others,” she said after today’s settlement was confirmed.

“Unfortunately, and despite these efforts, tax authorities in Spain pursued a case against me as they have against many professional athletes and other high-profile individuals, draining those people’s energy, time, and tranquillity for years at a time.

“While I was determined to defend my innocence in a trial that my lawyers were confident would have ruled in my favour, I have made the decision to finally resolve this matter with the best interest of my kids at heart, who do not want to see their mum sacrifice her personal well-being in this fight.

“I need to move past the stress and emotional toll of the last several years and focus on the things I love, my kids, and all the opportunities to come in my career.”