Shakira Reaches Deal to Avoid $16 Million Tax Fraud Trial. Here’s What to Know

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Shakira has reached a last-minute settlement with Spanish prosecutors over allegations of tax evasion, on the opening day of her trial in Barcelona.

The 46-year-old Colombian pop sensation, whose full name is Shakira Isabel Mebarak Ripoll, agreed Monday to pay a fine of €7.3 million ($8 million), despite saying she was “confident” the court would have found her not guilty.

Shakira also accepted a further fine of €438,000 ($478,000) and will receive a suspended three-year sentence, the judge presiding over the trial said on Monday.

The high-profile case alleged that Shakira failed to pay the Spanish government €14.5 million ($15.8 million) worth of taxes from 2012 to 2014. According to Spanish law, anyone who remains in Spain longer than six months a year is considered a resident for tax purposes. As such, the dispute focused on Shakira’s time in Spain during those years despite listing her official address as in the Bahamas.

Tax rates are considerably lower in the Bahamas than in Spain. Shakira was previously named in the “Paradise Papers” investigation that revealed the offshore activities of some of the world's most powerful people.

The prosecution was set to call 117 witnesses to testify on Shakira’s residency, including beauticians, healthcare professionals, and her driver. If found guilty, the Hips Don't Lie singer was set to face eight years and two months imprisonment and a fine of €23.8 million ($26 million).

In July, Prosecutors presented documents alleging that Shakira purchased a house in Barcelona in 2012, which serves as a family home with her ex-partner Gerard Piqué, a now-retired Spanish soccer player, and their two sons. The couple were married for 11 years before separating in early June. In response to the allegations, Shakira’s team argued that until 2014, most of her income was generated from international tours, during which she spent long periods abroad.

Shakira has long maintained her innocence, which she reiterated in a statement published Monday, after her settlement. “Throughout my career, I have always strived to do what's right and set a positive example for others,” the statement said, adding that she has sought tax advice from consulting firms PWC and EY.

“Unfortunately, and despite these efforts, tax authorities in Spain pursued a case against me as they have against many professional athletes and other high-profile individuals, draining those people's energy, time, and tranquility for years at a time.”

“While I was determined to defend my innocence in a trial that my lawyers were confident would have ruled in my favour, I have made the decision to finally resolve this matter with the best interest of my kids at heart who do not want to see their mom sacrifice her personal well-being in this fight,” the statement continued.

Shakira has a second tax fraud investigation that is still pending, according to Reuters.

The Spanish government has been cracking down on tax evasion in recent years. A number of other high profile individuals have been pursued by Spanish authorities for similar charges, including soccer players Cristiano Ronaldo and Lionel Messi, who were also fined large sums of money. Both were found guilty but avoided prison time with suspended sentences.

The country has implemented new measures to find those who do not declare income and taxes and assets as stipulated by law. These measures include tax reform laws and tracking of offshore wealth. 

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