The artist’s links with the Grand Duchy had been known since 2017 due to the revelations of the Panama Papers.
tax evasion
Yannick LAMBERT
The artist’s links with the Grand Duchy had been known since 2017 due to the revelations of the Panama Papers.
Shakira’s ties to Luxembourg are back in the spotlight as the pop star faces jail time and a fine from the Spanish public prosecutor’s office for using shell companies in what the Spanish justice considers to be tax havens.
Spanish prosecutors have requested an eight-year prison sentence and a fine for the pop singer, who is from Colombia and whose full name is Shakira Isabel Mebarak Ripoll, over allegations of tax evasion amounting to nearly 15 million euros, reported international media.
An exemption of 80% of net assets
These allegations are compounded by the fact that the artist used front companies in Luxembourg and the Netherlands, two countries often criticized for being “tax havens”, according to the International Consortium of Investigative Journalists, which had access to confidential files.
Shakira’s links to Luxembourg have been known since 2017, due to revelations from the Panama Papers, a previous journalistic investigation. The singer is the sole beneficial owner of ACE Entertainment Sàrl, established in Luxembourg in 2008 as a financial holding company, which manages copyright assets worth more than 31 million euros.
45,000 holding companies in Luxembourg
Her representatives claim Shakira is innocent and rejected a settlement deal with Spain earlier this year. According to the Spanish judges, the tax evasion took place in 2012, 2013 and 2014, when the singer lived more than 200 days in Spain, which made her liable for tax in the country. What Shakira has been able to benefit from is a tax regime that allows an exemption of 80% of net profits and capital gains related to certain intellectual property rights, such as trademarks.
In 2019, Luxembourg had 45,000 holding companies, known as Soparfis (société à participations financiers), indicated the statistics agency Statec. By comparison, the Netherlands had just 15,000 such companies in 2016, according to the International Monetary Fund.
Russian mafia and organized crime
Soparfis pay 0.5% on their net assets in the form of an annual wealth tax, and an additional 0.05% on assets over €500 million. Their large numbers make them the biggest corporate taxpayers, responsible for 28% of all corporate income taxes in Luxembourg, according to figures from the Ministry of Finance in 2022.
A journalistic investigation, OpenLux, published in February 2021 by more than a dozen media outlets around the world, detailed how Russian mafia bosses, people close to the Venezuelan regime and individuals linked to organized crime in Italy were among those who hid money in the Grand Duchy.
This article first appeared on luxtimes.lu
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