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What we all can learn from Shakira's tax evasion case

Shakira has just settled her tax evasion case by admitting wrongdoing and choosing to settle the matter. Hacienda (the Spanish Tax Revenue Agency) accused Shakira of defrauding 14.5M Euros from 2012 to 2014.

Some of the charges brought against her encompassed the following:

⭕ Tax-Avoidance Intent:

Allegations were made that Shakira established a holding company internationally with the primary purpose of tax avoidance.

⭕ Residency Claim Discrepancy:

Shakira was accused of claiming residency in the Bahamas as opposed to Spain, where she had reportedly moved to be with Gerard Piqué from 2012-2014.

⭕ Overreporting Expenses for the El Dorado Tour:

It was asserted that Shakira overreported expenses related to her El Dorado tour. The charges specified a declared amount of 28.4 million Euros, while tax authorities calculated 21.3 million Euros. The discrepancies included accounting errors by her team and the inclusion of personal expenses, such as costs associated with flying her children during the tour.

⭕Omitting to Declare Income:

Shakira received a retainer worth 9.6M Euros in 2011 for her El Dorado Tour. Since the tour started in 2018 Shakira's accounting team should have reported this income in 2018 (income earned!).

If I could sit down with Shakira I'd like to understand how she got herself into this mess... It's easy to say that she SHOULD HAVE KNOWN but... did she understand the gravity or potential consequences? Did she feel safe and comfortable asking questions? Or did she pass the responsibility to her brother or her romantic partners at the time?

The takeaway for you is to hold yourselves accountable and take responsibility for your financial matters both personally and in your business.

The knowledge and authority that come from understanding your business and tax responsibilities will empower you immensely. We see it in our clients often and we are SO thrilled for them!

As for you Shakira, we hope you find a good finance team that guides you and teaches you how to lawfully maximize your profits, and a bookkeeping team that disallows your expenses proactively so you don't have the IRS on your back (now that you moved back to the USA).


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