Prosecutors accuse the 45-year-old artist of withholding € 14.5 million in revenue from the Spanish tax authorities between 2012 and 2014.
According to prosecutors, Shakira moved to Spain in 2011, but remained in the Bahamas until 2015.
The defense, in turn, claims that she moved to Spain full time only in 2015, and therefore was not taxable in the country until then.
A court in Barcelona on Thursday rejected the singer’s appeal on the grounds that the evidence she had submitted to prove her case was insufficient.
It is now up to the prosecution to bring charges.
There is much to suggest that this will be the case, but according to Spanish El Pais there is still the possibility that the parties will reach a settlement on a fine in order to avoid a trial.
The star’s lawyers say in a statement that she “always handled her tax obligations flawlessly in the countries where she was taxable”.
Shakira, whose full name is Shakira Isabel Mebarak Ripoll, has sold over 60 million albums worldwide.