Shakira allegedly defrauded the Spanish Treasury of around €6 million ($6.4 million) in 2018, when she was already residing in Spain, by using a “network of businesses” to “simulate” the transfer of her music rights to instrumental companies.
On Tuesday, prosecutors with the Barcelona financial crimes unit released new details about the second legal case against the Colombian singer after the probe was opened in July. The alleged fraud amounts to €5.3 million ($5.6 million) in personal income tax and more than €700,000 ($740,000) in wealth tax. Prosecutors have asked Interpol to notify the singer, who currently lives in Miami and who is being summoned to testify in connection with two alleged tax crimes.
Two months from now, Shakira will stand trial in a separate case that hinges on where she lived between 2012 and 2014 and involves €14.5 million ($15.3 million) in taxes.
The prosecutors’ second criminal complaint notes that, in 2018, Shakira lived in Esplugues de Llobregat (Barcelona) with former Barça defender Gerard Piqué and their two children, which meant that she was under the obligation to pay all of her taxes in Spain. In her tax return that year, however, she did not include all her income. She notably left out what she made from her El Dorado world tour, which involved 53 concerts in 22 countries between June and November of that year, mainly in Europe, the United States and Latin America. “Motivated by the desire to pay as little tax as possible,” Shakira Isabel Mebarak Ripoll “used a corporate structure” and deducted expenses “inappropriately,” according to the Public Prosecutor’s Office.
Shakira diverted this income to offshore companies domiciled in countries with very low taxation and “high opacity.” The prosecution also points out that these companies are purely instrumental, i.e., they have no real activity, since they “lacked human and material means” and their sole purpose is to contribute to avoiding the payment of taxes.
The most relevant company of that international network is AC, based in Luxembourg, which received (under a far-reaching contract signed with Live Nation in 2008) income from the assignment of Shakira’s music rights. Ever since the singer began paying her taxes in Spain of her own free will (2015), she had included all the income from that company in her tax return. But in 2018 she declared only 75%, with the argument that the company had “important assets” and carried out vital duties.
None of this is true, according to the prosecution. AC was nothing more than a “shell company” that “did not carry out any activity.” But the accusation goes further: the most significant asset of this Luxembourg firm was Shakira’s music rights, which she had only assigned “formally” and through a series of “simulated contracts” without any real intention of transferring them. “Shakira maintained at all times”, the complaint concludes, “full availability and control over her own music rights.”
€37 million for ‘El Dorado’
The successful El Dorado tour earned Shakira €37 million ($39.1 million) plus another €4.2 million ($4.45 million) in sponsorships, which she collected through different companies and in different ways. Part of the money was paid by Live Nation in 2011 as an advance; however, that payment should have been included in the 2018 income tax return, that is, at the time of accrual, as expressly requested by the singer’s tax advisors. Shakira was aware of this, the complaint underlines.
The singer from Barranquilla earned other income that year (from advertising, sponsorship and music rights) that brought her total income to €48 million ($50.8 million). A world tour also entails considerable expenses, which Shakira’s tax return set at €28.4 million ($30 million). But the Spanish Treasury, again, disagrees and considers that the correct figure is lower, about €21.3 million ($22.5 million).
As for the charge relating to wealth tax, prosecutors said that the singer’s companies have financial assets totaling €147.2 million ($155.8 million) and real estate — a house in Barcelona, another one in the Bahamas, two in Miami, one in New York and another one in Barranquilla — worth €12.1 million ($12.8 million). Her return was not accurate on this point either, as the singer should have paid €773,600 ($818,762).
In a 26-word statement issued on June 4, 2022, Shakira and Gerard Piqué announced to the world that they were separating. The singer has since moved to Miami with her children and become a symbol of female empowerment through songs like Bzrp Music Sessions #53, which for three days in January was the most popular song on Spotify worldwide.
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