According to AS, Costa was handed a six-month prison sentence, which he will not serve, and a total fine of €543,000 (£482,000) after the Atletico Madrid striker defrauded the Spanish state of more than €1m (£900,000) in 2014.
The former Chelsea star was accused of defrauding the treasury of more than £900,000 by not declaring payments of more than €5.15m (£4.63m) after his move to Chelsea in 2014.
The Spain worldwide past year paid "1.14 million euros, fully repaying his tax debt, interest included", which facilitated the deal struck with Spanish prosecutors, a court decision seen by AFP read.
Diego Costa made a brief appearance at court on Thursday as he prepares to face trial for alleged tax fraud.
But the cantankerous centre forward will not spend any time behind bars, as under Spanish law, a sentence of under two years for a non-violent crime can be commuted to a fine, and Costa paid €36,500 on top of his original penalty to dodge jail.
He also concealed more than one million euros in image rights.
"Diego Costa reached an agreement with the Prosecutor's Office months ago and has already paid the corresponding fine plus interest", said an Atletico spokesman in a statement reported by Mundo Deportivo.
Costa, who rejoined Atletico in 2017, appeared in a Madrid court on Thursday wearing a mask due to the coronavirus pandemic, for a short hearing to finalise the agreement with prosecutors.
And Portugal and Juventus player Cristiano Ronaldo cut a deal with a court in Madrid in January 2019 over tax avoidance charges, accepting an €18.8m fine.
"The request for a prison sentence was withdrawn".
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