NEWS / Shakira wins tax residency case against Spain

Colombian pop singer Shakira Mebarak Ripoll has won a court case against the Spain’s State Tax Administration Agency (Agencia Estatal de Administración Tributaria), which had accused the star of failing to pay Spanish income and wealth taxes owing to her being deemed a tax resident of the European country. The case concerns tax year 2011 and lasted for a whopping 8 years. The State Tax Administration Agency now has to pay back Shakira 60 million Euros plus interest and court costs, Bloomberg news reported.

The tax controversy hinged on the debate over whether Shakira had been present in Spain for more than 183 days in 2011, which is the minimum necessary to qualify a given individual as a tax resident of Spain. Another way an individual could qualify as a tax resident of Spain would be if the State Tax Administration Agency could prove that your “center of economic interests” is in Spain.

The “center of economic interests” test can be somewhat nebulous and includes having a Spanish tax resident spouse and/or minor children, although this assumption can be rebutted. The State Tax Administration Agency argued that Shakira was a tax resident of Spain in 2011 due to her long stays in Barcelona as well as her relationship with former FC Barcelona soccer player Gerard Piqué and her subsequent supposed integration into Spanish life. The singer was ordered to pay 55 million Euros: 27 million Euros covering the principal tax amount plus an additional 27 million in fines for failure to file and pay.

In reality, Shakira was doing her Sun Comes Out (Sale el Sol) World Tour that year, which included 120 concerts across 37 countries. She did not have any real estate or companies registered in Spain and claimed tax residency in The Bahamas, a country that does not impose an income tax. Nevertheless, Shakira admitted to have been physically present in Spain for 143 days, 40 days less than the statutory minimum required to conclusively prove tax residency, Greenback Expat Tax Services reports.

With the case dragging for years, the matter finally reached Spain’s National High Court (Audiencia Nacional) this year, which held that the tax agency had failed to prove its case. With all the documentary evidence they could find, the tax collector could only definitively demonstrate a physical presence of 163 days in 2011, still 20 less than the 183 required. The National High Court also rejected the State Tax Administration Agency’s backup argument that Shakira’s relationship with Piqué was equivalent to a marriage on the basis that the couple were in an informal relationship rather than officially registered matrimony.

“After more than eight years of enduring brutal public targeting, orchestrated campaigns to destroy my reputation, and sleepless nights that ultimately impacted my health and my family's well-being, the National High Court has finally set the record straight,” Shakira said in a statement to ABC News. “Here was never any fraud, and the Administration itself could never prove otherwise, simply because it wasn't true.”

Shakira’s statement further stated that she hoped her case would serve as a precedent for the Tax Authority, which the singer accused of abusing and crushing ordinary citizens through presumption of guilt, putting the burden of proving innocence on those ordinary citizens, at the cost of “emotional and financial ruin,” ¡Hola! reported.

The 2011 case is not the only tax residency argument Shakira has had with the Spanish State Tax Administration Agency, with her settling a separate case in 2023 for 7.3 million Euros and another in 2024 for 6.6 million.

Shakira is also not the only celebrity to be targeted by the Spanish State Tax Administration Agency. In 2016, Argentinian soccer superstar Lionel Messi was forced to pay 4.1 million Euros after being convicted of tax evasion, while his professional rival Portuguese soccer player Cristiano Ronaldo settled his own tax evasion case in 2019 for 18.8 million Euros.

Shakira’s case demonstrates how important it is to keep track of travel and other factors when it comes to determining one’s tax residency. Failure to do so could result in steep fines and even prison time. One way of proving one’s tax residency is to present a tax residency certificate.

A&M Logos International is here to help you obtain your US tax residency certification (also known as IRS Form 6166) to proactively show foreign tax agencies that you are, in fact, a US tax resident. We handle the whole process from A to Z, preparing all required forms with the Internal Revenue Service (IRS), submitting the application, and then getting them duly apostilled / authenticated and translated if necessary. Contact us today via e-mail at info@apostille.us or by phone at (212) 233-7061. You can also place an order on our website.