Spanish prosecutors say Shakira’s alleged use of tax haven fueled tax fraud

Spanish prosecutors have demanded eight years in prison and a hefty fine for Colombian pop star Shakira, accusing the star of fueling an alleged $15.5 million tax fraud by using shell companies in tax havens.

Spanish authorities said the “use of a legal entity as an intermediary” to conceal her income was an aggravating factor, El País reported, citing a source familiar with the case. If convicted, she could also face a $24 million fine.

Her lawyers previously told reporters investigating some of the singer’s offshore businesses that “the fact of owning a company overseas is purely based on operational and commercial matters, and under no circumstances should one enjoy any financial advantage or benefit.”

Shakira, whose full name is Shakira Isabel Mebarak Ripoll, has maintained her innocence and rejected a settlement agreement with Spanish authorities earlier this year. The Latin American artist said she had paid back the money she owed the authorities with interest.

Shakira “has always demonstrated impeccable conduct as a person and as a taxpayer and is fully willing to resolve any differences from the outset, even before criminal proceedings,” said a recent press statement from her representative. .

The tax fraud case is now expected to see the pop star go to trial for six tax offences allegedly committed between 2012 and 2014 when she was with Barcelona footballer Gerard Pique, according to tax inspectors (Gerard Piqué) and is tax resident in Spain. No trial date has been announced.

The singer denied authorities’ claims, saying she was living in the Bahamas at the time and only visited Spain “occasionally”. The legal case began in 2018.

Shakira Offshore

The International Consortium of Investigative Journalists and its media partners first exposed Shakira’s use of offshore companies in low- or zero-tax jurisdictions in Paradise Papers, an investigation published in 2017 based on 13.4 million copies obtained by German newspaper Süddeutsche Daily leak of secret financial records.

The project revealed how many famous actors and musicians, including Madonna and U2’s Bono, used shell companies to potentially lower taxes or shift profits overseas. All denied wrongdoing.

Among them, confidential documents show that Shakira, known for hits such as “Hips Don’t Lie” and “Waka Waka”, used the island of Malta to transfer music rights worth more than $30 million. A corporate document listed her as a Bahamian resident and the sole shareholder of the Maltese company. Her lawyer told reporters at the time that the arrangement met “all legal requirements.”

Confidential documents also show the singer’s links to companies registered in Luxembourg and the Netherlands, two European countries also considered tax havens.

Last year, as part of the Pandora Papers investigation, the ICIJ and media partners each examined the breach of financial records of 14 offshore financial services providers, linking the award-winning singer with three other shell companies registered in the British Virgin Islands. Linked up, this is another notorious tax haven.

A leaked 2019 letter of recommendation from Shakira’s U.S. attorneys to a British Virgin Islands-based financial services provider said their client had “proven to be an honest, trustworthy, and well-behaved individual.”

All companies identified in the Pandora Papers have been scrutinized by Spanish authorities, ICIJ’s partners in La Sexta and El País reported last fall.

Her representative told reporters that Shakira used an offshore company because most of her income came from outside Spain and the Spanish tax authorities knew about all her companies. They also stated that these BVI companies had no revenue or activity.

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