The case centres on where the singer was living from 2011 until 2015. She claims that she was not resident in Spain and therefore is not liable to pay tax on her worldwide income, only what was earned in the country.
The settlement relates to the year 2011, only. Shakira remains under investigation by Barcelona’s prosecutor’s office and could get hit for more money and faces a potential jail term for tax evasion between 2012-2014, reports Spanish newspaper El Periodico.
The paper added that the singer paid the €20m (£17.6m, $24.6m) as that was the only way she could lodge an appeal.
The prosecutor’s office and taxman are looking into the case put forward by Shakira’s lawyers and will determine whether or not to pursue her through the courts for the further three years.
Home is where the heart is
The tax authority’s case is that she was a de facto resident in Spain between 2011 and 2014. Shakira’s partner since 2010 and the father of her children is Barcelona footballer Gerard Pique, who has played for the team since 2008.
Shakira officially made Spain her country of residence in 2015 – however, those spending more than 183 days a year in the country are automatically considered residents for tax purposes.
She was previously a tax resident in the Bahamas, according to media reports.
Expats living in Spain can choose to remain non-resident provided they pay required annual taxes and are not in the country for more than 183 days each year.
Those not leaving the country for the required number of days or failing to pay the annual taxes could face the wrath of Spain’s taxman.
In February 2017, the Spanish authorities confirmed they were targeting high net worth individuals after information sharing through the common reporting standard (CRS) went live.