Prosecutors were asking for a six-month jail sentence and a fine of 507,208 euros to punish Costa for defrauding the Spanish state of 1,014,416 euros in 2014.
Atletico Madrid forward Diego Costa appeared in court wearing a white mask in the Spanish capital on Thursday to ratify a pact he made with prosecutors to resolve a tax fraud case against him.
Prosecutors were asking for a six-month jail sentence and a fine of 507,208 euros ($564,877 dollars) to punish Costa for defrauding the Spanish state of 1,014,416 euros in 2014.
According to a court filing published last month, Costa, 31, did not declare payments of 5,150,622 euros from his 2014 transfer from Atletico to Chelsea in his tax return, as well as more than one million euros in image rights.
In accordance with Spanish law which allows penal sentences below two years for non-violent crimes to be exchanged for a financial penalty, Costa has agreed to pay an additional fine of 36,500 euros on top of the 507,208 euros to avoid jail time.
"Diego Costa reached an agreement a few months ago with the prosecutor and has already paid the corresponding fine plus interest and the request for a prison sentence was withdrawn," an Atletico spokesman told Reuters on Wednesday.
"This week it is expected that agreement will be ratified in court, as is mandatory."
Spain international Costa, who was wearing a mask due to the COVID-19 pandemic, returned to Atletico from Chelsea in 2017 for a reported 55 million euros after helping fire the London side to two Premier League titles.