From reading Shakira’s sentence, it can be inferred that the singer was something like a tax stateless person in 2011. The ruling of the Court holds that it has not been proven that she was a resident in Spain for 183 days for tax purposes, but her defense also did not claim that she was in another jurisdiction during those days. “She had a tax certificate at her home in the Bahamas. But the truth is that she is not a resident for 183 days anywhere because she is actually on an international tour,” says her lawyer, José Luis Prada.
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The hypothetical figure of the tax stateless person is not very common and, in fact, some lawyers deny that it can exist. Determining where a taxpayer has their domicile is one of the main disputes between the Spanish and regional tax authorities and large taxpayers. In Catalonia, for example, the transfer of tax residence to another community or state is systematically analyzed ex officio in all cases from certain income levels. The Generalitat is competent in the wealth tax and the State in the personal income tax (IRPF).
The key to all these investigations is to determine whether the taxpayer has spent half the year (183 days) in Spain or not. If so, they must pay the Spanish Tax Agency. Three criteria are used to count the days. The first is certified days, which are justified by card charges, transport tickets, entries to sports clubs, visits to the physiotherapist, or any other system. “The Tax Agency sends information requests to different service providers to verify if a taxpayer was in Spain,” explains Alicia de Carlos, partner at Cuatrecasas, expert in advising private clients. “In one of our cases, the Tax Agency asked about the days he went to the physio,” adds Sergio González-Anta, partner at KPMG Lawyers.
Specialist lawyers trust that the Supreme Court will set a doctrine on what is understood by domicile in the eyes of the tax authorities
The second group of days are “presumed” days, in which the Tax Agency presumes the taxpayer was in Spain because, for example, it could be reliably certified that they were in the country between Monday of one week and the following Friday.
The third group of days – which tipped the balance in Shakira’s case – are days of “sporadic absences,” for which the Tax Agency considers the taxpayer a resident in Spain even though they were in another tax jurisdiction for work. The ruling holds that this could not be proven and, therefore, rules in favor of the singer.
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Now, the State will file an appeal in cassation with the Supreme Court. “We hope that the Supreme Court continues to set doctrine on the concept of sporadic absence and when it should be considered as tax residence time in Spain,” says de Carlos.
The Tax Agency reviews card usage, gym entries, and physio visits to determine residence
González-Anta explains that it is not common for taxpayers to litigate against the Tax Agency because by doing so they lose early payment discounts and, in addition, a guarantee must be deposited to ensure payment of the tax if it is confirmed. “Most clients prefer not to go to court to avoid the uncertainty of having their money blocked for years,” according to González-Anta.
Although some lawyers claim that the Tax Agency loses most lawsuits, AEAT statistics for the 2020-2023 period were unfavorable to it in only 29% to 38% of cases. Although Shakira’s “tax stateless” case is surely the one with the highest amount.
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