In a case in which Spanish prosecutors have accused Colombian pop singer Shakira of tax fraud, she faces up to eight years in prison.
Shakira, whose full name is Shakira Isabel Mebarak Ripoll, is accused of failing to pay approximately $15 million in taxes to the Spanish government between 2012 and 2014. Six separate accusations accompany the charges. In addition, the prosecution has stated that they will seek a $24.5 million fine.
The singer “trusts her innocence and wishes to put the issue in the hands of the law,” according to a statement released on July 27 by the singer’s public relations firm, Llorente y Cuenca.
The following is a comprehensive rundown of everything you need to know about the ongoing tax fraud investigation:
Will the tax evasion case against Shakira go to trial?
After the singer, now 45, turned down a settlement offer from prosecutors in her tax fraud case, it is expected that the case will go to trial. There is no set date for the trial at this time.
If she is found guilty, the prosecution asks the judge to sentence her to eight years and two months in prison.
First-time offenders sentenced to less than two years in prison may petition the judge to have their sentence reduced or completely waived.
When did Shakira come under suspicion of tax evasion?
In December 2018, Spanish prosecutors charged Shakira with tax evasion, alleging that she failed to pay millions of euros in taxes to the Spanish government between 2012 and 2014.
Shakira claimed the Bahamas as her official residence for tax purposes during those years. However, prosecutors claim that she was in Spain with her now-former partner, Spanish soccer player Gerard Piqué, the father of her two children.
What statements has Shakira made about the tax fraud case?
Shakira denied any wrongdoing in front of a judge in 2019 as part of an investigation into her alleged involvement in tax evasion. According to her public relations firm, she made the payment in full, including interest, as soon as she was informed of the obligation by the tax office.
The location of her residence during the relevant years is an important piece of evidence in this case.
In May, the court denied her appeal and recommended that she be tried.
After a three-year investigation, Spanish Judge Marco Juberas concluded that there was “sufficient proof of wrongdoing” to warrant bringing the case to trial.
What precisely is the issue with Shakira’s taxes?
According to those familiar with Spanish tax law, this case may revolve around the definition of the term “resident.”
According to Douglas S. Stransky, a partner in the Boston-based firm Sullivan & Worcester who practises international tax law, it comes down to how many days a person has lived in Spain in a year before being considered a “tax resident.” He claims that the “tax resident” threshold can be as low as one day or as high as 365 days.
Will someone who buys a home in a foreign country be considered a resident of that country even if they only stay for a few days, say four? Stransky claims. “I believe that Shakira did spend time in Spain in this particular case; however, the main question is whether she spent enough time there to be considered a tax resident of the country.”
How do other entertainers avoid the difficulties of foreign taxation?
Tax lawyers assist global performers like Shakira and others in determining where they are required to pay taxes based on their citizenship, the location where they spend the majority of their time living, and the locations in which they perform in any given year, according to international tax law expert Kevin E. Thorn, managing partner of Thorn Law Group in Washington.
Thorn believes that the Spanish authorities may not fully comprehend the complicated interplay that exists between the laws of many countries and international treaties when it comes to taxes.
Thorn, a former IRS lawyer, believes that those individuals are “rushing to judgement” without all of the information and a complete understanding of all of the regulations that would apply to this situation. They are putting pressure on her in order to persuade her to negotiate before disclosing all relevant information.
Why is Shakira being threatened with incarceration in Spain?
To this day, the Spanish authorities have not made any public presentations of evidence proving Shakira committed a tax crime rather than simply making a tax error.
Thorn believes that the prosecutors have harmed their chances of reaching a quick settlement with Shakira by publicising their fear of jail time before the case even goes to trial. Thorn claims that “if a mistake was made (regarding her taxes), her lawyers will correct it,” but he is unsure whether this is a criminal matter.
According to Stransky, the vast majority of tax issues in Spain are dealt with as civil rather than criminal matters. This is true in the United States as well.
“The vast majority of the time in situations like this,” Stransky says, “the government does not pursue the criminal road.” “My best guess is that (Spanish authorities) are attempting to coerce her into settling the case by (using) negative publicity and the threat of jail time,” writes the author.
Contributing: The Associated Press