Shakira to testify in June over tax non-payment

The artist, 42, has already refunded the €14.5 million in unpaid tax, plus interest, but any case of ‘evasion’ exceeding €120,000 automatically becomes a criminal offence, meaning celebrities will, by default, fall into this category given their high earnings.

Shakira’s representatives say she was not living permanently in Spain in the years 2012, 2013 and 2014, since she was on tour and also working as coach for The Voice in the USA.

But the prosecution service considers she had been ‘pretending’ not to reside in Spain, and that she had been in the country for more than the requisite 183 days required to become a tax resident.

The half-Lebanese musician and singer-songwriter lives with her FC Barcelona midfielder husband, Gerard Piqué, and their two sons, Milan, six and Sasha, four.

Although the couple got together after the 2010 FIFA World Cup in South Africa, where Shakira’s Waka Waka was the theme tune, they did not live together straight away due to their global career commitments, the artist’s representatives say.

Prosecutors say Shakira set up a network of front companies offshore to ‘deliberately avoid’ paying income tax, setting up firms in the British Virgin Islands, the Cayman Islands, Malta, Panamá and Luxembourg.

She is also said to have signed ‘tax ruling’ deals with authorities in Luxembourg to obtain ‘specific and privileged taxation conditions’ at a time when she ‘already lived in Spain’, according to the prosecution.

The claim against her also states that she filed non-resident tax declarations in the State of California, USA, in the years in question, declaring that she had been living there for 61, 118 and 117 days respectively.

In total, the Spanish fiscal authority says she ended up owing €12.3m in income tax and €2.2m in tax on her assets over these three years.

As well as pointing out that she has now paid her dues and that she was not living in Spain permanently during those years, Shakira’s representatives say she has always complied with her tax duties and followed the recommendations of her accountants at Pricewaterhouse (PwC), one of the world’s most famous in its field and recognised as having extensive knowledge of world taxation requirements, including in Spain.

But the prosecution’s claim is also said to be directed against Shakira’s accountant and tax advisor from PwC in the USA, whom, it alleges, was director of several of the dormant offshore companies Shakira set up.

At present, the prosecution says, the ‘exact participation’ of PwC employees in the ‘restructure or maintenance’ of the ‘offshore company network’ reportedly in Shakira’s name is ‘not known’.

A number of celebrities, including sports and entertainment personalities, have fallen foul of Spain’s taxation laws in similar circumstances when ceding royalties through dormant companies or channelling earnings offshore.

In most cases, they claimed they had left their financial affairs in the hands of their accountants, or had followed a structure that was legal in their previous country of residence and were unaware this was not the case in Spain.