Shakira’s taxes don’t lie as singer wins £48m tax row
A Spanish court has ordered the country’s tax authority to repay Colombian singer Shakira £48m after ruling that it had improperly collected the money in a dispute over her tax payments.
In a statement published today, Madrid’s National Court said it has upheld Shakira’s appeal against the fine she was hit with five years ago, after the Spanish Tax Agency alleged she had not paid the correct amount of tax in 2011.
The court said the tax authority was unable to prove that the singer had spent over 183 days in Spain in 2011 – the minimum amount required for residents paying personal income tax in the country.
It added that it “understands that Shakira’s stay in our country was 163 days” and that the tax authority “has not proven” that she had not been truthful about the length of her stay.
The tax authority has been ordered to return the amount it fined Shakira, alongside paying the interest it had accumulated and her legal costs.
The repayment includes approximately £21m in income tax and nearly £22m in fines for the infringement.
Tax authorities ‘cannot cherry pick’
The repayment includes approximately £21m in income tax and nearly £22m in fines for the infringement, and the court said that Shakira “has proven” she was not in Spain for 183 days or more.
The singer has maintained her official tax residence in the Bahamas, where she co-owns a private island and property.
The court said the tax agency had “extensively analysed” whether Shakira lived in the Bahamas or not when they should have been working to prove whether she was a Spanish resident.
“Whether or not the Bahamas was a tax haven in 2011 is irrelevant,” the court said.
Miles Dean, a partner at tax advisory firm Andersen LLP, told Morning Wire the case “highlights the risk of conflating personal ties with the economic nexus the statute requires.”
“Shakira’s case illustrates the evidential burden on Spanish tax authorities when asserting residency over a high-mobility individual whose physical presence falls below the 183-day threshold,” Dean stated.
“Authorities cannot cherry-pick personal ties while ignoring economic ties pointing elsewhere, which in Shakira’s case is a Bahamas residence and a touring-based income profile,” he added.
The court said the decision relates only to the 2011 tax dispute, one of several involving the singer and the tax agency, including a settlement she reached with prosecutors in 2018 to avoid a trial in a border fraud case.
“This resolution comes after an eight-year ordeal that has taken an unacceptable toll, reflecting a lack of rigour in administrative practices,” Shakira’s lawyer José Luís Prada said in a statement.
Spain’s tax agency said it would appeal to the country’s Supreme Court and that it would make no payment to Shakira until a final decision has been reached, the BBC reported.