Spanish court clears Shakira in tax residency dispute, orders state to refund fines

MADRID (AP) — A court in Spain has cleared Shakira of tax fraud and told the state to hand back more than 55 million euros (about US$64 million) in penalties it should not have imposed, according to a ruling document reviewed Monday by The Associated Press.

The judgment caps a lengthy run of tax disputes in Spain involving the Colombian recording artist.

Judges in Madrid said the case centred on the 2011 tax year and that officials never showed Shakira qualified as a Spanish tax resident that year.

Under Spanish law, a person counts as a tax resident only after spending more than 183 days in the country during the year in question.

The court found that prosecutors established just 163 days of residence for Shakira in 2011 and directed Spain’s Treasury to pay back the taxes she paid on that basis, together with interest.

The tax agency had maintained that Shakira’s links to Spain that year included a relationship with former footballer Gerard Piqué and that her principal business activity was based in the country.

The High Court rejected both lines of argument. It said the partnership could not be treated as a marriage for tax purposes and that officials did not demonstrate that “the main center or base” of her work or economic interests in 2011 was in Spain, whether directly or indirectly.

Shakira, who challenged the assessment, said through her legal team: “There was never any fraud, and the Tax Agency itself was never able to prove otherwise, simply because it wasn’t true.”

Her lawyer said the Treasury must now return 60 million euros (nearly US$70 million), including interest.

Attorney José Luís Prada called the outcome the end of “an eight-year ordeal that has taken an unacceptable toll, reflecting a lack of rigor in administrative practices.”

The ruling is separate from a 2023 agreement in another Spanish tax matter. In that case, Shakira avoided trial by accepting that she had not paid roughly 14.5 million euros (then about US$15.8 million) in Spanish income tax for 2012 through 2014. She paid 7.3 million euros (then about US$8 million) on top of the back taxes and interest already owed.

The artist behind “Hips Don’t Lie” also surfaced in the 2017 Paradise Papers disclosures about offshore tax structures used by wealthy public figures, alongside names such as Madonna and U2’s Bono.

Over roughly the past decade, Spanish revenue officials have pursued several football stars, including Lionel Messi and Cristiano Ronaldo, over unpaid taxes. Those athletes were convicted of evasion but did not serve prison time under a rule that lets judges suspend sentences below two years for first-time offenders.