Due to a problem related to her vocal chords, Shakira has had to cancel her concert planned at the Rockhal in Luxembourg on 4 December 2017, which was scheduled as part of her El Dorado World Tour. However, according to the Paradise Papers, the Columbian singer Shakira is actually a permanent presence in Luxembourg, by means of the ACE Entertainment SARL Company, which was founded on 18 April 2008 by her sole partner, Tournesol Limited, established under Maltese law. In turn, the latter company’s sole partner is Shakira.
On 19 June 2009, the 125 shares representing ACE Entertainment’s initial capital totalling 12,500 Euros were converted into 12,500 shares worth 1 Euro each. On the same day, the sole partner decided to increase this company’s capital stock of the shares’ nominal value of 1 Euro up to 12,501 Euros by creating a new share of a nominal value of 1 Euro. Following this action, Shakira’s sole partner, Tournesol Limited, decided to subscribe to and release the newly-issued share by contributing “assets and music rights” in kind totalling 44,184,304 USD, i.e. 31,637,050 Euros. This amount was assigned for 1 Euro to the share capital and for 31,637,049 Euros to an issuance premium account to the balance of ACE Entertainment. This is the capital contribution that was reported within the framework of the Paradise Papers by the International Consortium of Investigative Journalists.
The creation of ACE Entertainment in Luxembourg took place after the entry into force on 1 January 2008 of the law exempting 80% of tax revenue from copyright income. Revenue from music rights in 2009 were therefore fully eligible for this advantageous tax rate under the so-called “Patent Box Law”. Of course, it is difficult to believe that Shakira did not benefit from this tax niche, as alleged by an “expert” involved in the press file (‘Wort’ of 9.11.2017).
Another article (published on 10.11.2017 in the ‘Land’) reveals the existence of a multitude of companies related to Tournesol Limited in Malta, the Netherlands and Luxembourg. As far as ACE Investment Fund Sicav FIS (an investment fund) and Carpe Diem Corp. SARL in Luxembourg are concerned, the issues involve for instance inter-company convertible loans, credit lines, account rectifications, delays in the publication of balances, and the refusal to compile the auditors’ report.
Whatever the case, it is clear for the auditors of ACE Investment Fund that from this inextricable network of companies, the singer was in full agreement to do all in her power to minimise her taxes on revenue from hits such as ‘La La La’, ‘Waka Waka’ and ‘Loca Loca’.
Move along, there’s nothing out there, everything is legal!?
Picture: Fernand Muller © UFE 2017