Pavarotti has had a long legal battle over taxes
The tenor could face three years in prison if he is found guilty.
Pavarotti told the court: "I don't feel guilty and if a law says the contrary, I want you all to know that I was acting in total good faith."
Italian prosecutors allege that Pavarotti still owes the government unpaid taxes for the period 1989 to 1995 - despite the tenor's payment of 24 billion lira in back taxes (£7.8m) in 2000.
Pavarotti needs to convince prosecutors that he was resident in the tax haven of Monte Carlo for the period in question - and not in Italy.
"A singer expresses himself in the world," he told the court - adding that he did not have a house in Modena and spent his time between New York, Monte Carlo and London.
Witnesses
"I earn abroad and bring the money into Italy - I don't think it's right to think ill of me for this reason," said the tenor.
Pavarotti did not appear at the opening of the trial in May.
His lawyer, Massimo Leone said in May: "We will present a series of documents and witnesses to show that the core of Pavarotti's business is not in Italy, but all over the world, from Britain to the United States."
Mr Leone has refused to indicate the exact amount of money in question.
This case is the culmination of a long-running battle over the tenor's taxes.
Successful career
Last summer Pavarotti agreed to pay the Italian government back taxes for the same period in installments.
But under Italian law once the authorities have been notified of a criminal act there is a duty to prosecute.
And after a hugely successful career during which he has sung in 60 countries, given nearly 2,000 performances and won five Grammies, the Italian taxman is now demanding a further penalty.
The prosecution is set to call 25 expert witnesses, including opera impresarios from the United States and several European countries.
The next hearing is on Tuesday, but the singer is not expected to be in court.