- Shakira reached a deal to resolve charges that she failed to pay Spanish income tax from 2012 to 2014.
- Spain accused her of improperly filing taxes to the Bahamas when she spent the majority of her time in Spain.
- Remote workers should take extra care when filing taxes to avoid US penalties.
Her hips don’t lie, but Spanish authorities say Shakira’s accountants did for years.
The international pop star reached a deal with Spanish prosecutors on November 20 to avoid an 8-year prison sentence and a fine of €24 million ($26 million) over charges that she failed to pay €14.5 million ($15 million) in Spanish income tax between 2012 and 2014.
Per the AP, the trial was called off after just eight minutes — and despite denying the charges for years, Shakira said in a statement that she “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 root of the issue was Shakira’s location during those two years. While the prosecutors claimed Shakira spent the majority of that time in Spain and should have paid taxes to Spain on the income she earned during that period, she listed the Bahamas — where tax rates are lower than Spain — as her primary residence and filed her taxes there.
It’s a legal dilemma many other celebrities have found themselves in — and it’s something remote workers should be extra careful about. As remote work surged during the pandemic, many workers took it as an opportunity to become digital nomads and pursue employment while traveling and finding a range of income opportunities abroad.
For example, one 29-year-old, recently told Insider that she’s maintained the digital nomad lifestyle since 2019 and makes about $4,000 a month. Over 15 million Americans have now taken that route, up 112% from 2019, and over 25 countries have started digital-nomad visa programs to attract those remote workers.
But taxes can be tricky as a digital nomad. The key thing to remember is that if you are a US citizen, you’re on the hook for US taxes. The New York Times previously reported that Americans who pay a foreign income tax might be able to get a deduction when filing their US tax return, but it depends on the foreign country’s tax rules. Still, some visa programs allow visitors to work remotely while avoiding a local income tax for under a year.
While it’s unlikely a digital nomad making thousands of dollars a month would face the same fraud charges as Shakira, the US can still impose penalties on those who file their taxes to the wrong location, so those living abroad should take extra care during filing season.
When it comes to Shakira, though, it’s time for her to pick herself up and dust herself off because she has another pending tax fraud investigation over accusations she evaded paying income taxes in 2018.