Code of Best Practices of Tax Professionals

Code of Best Practices of Tax Professionals

 

INTRODUCTION

The OECD defines the cooperative relationship as “a relationship between the taxpayer and the tax administration based on cooperation and mutual trust between both parties that implies a willingness to go beyond the mere fulfillment of their legal obligations” .

The development of the cooperative relationship involves:

• On the one hand, the simplification and facilitation of voluntary compliance with tax obligations, increasing the legal and operational security of taxpayers and tax professionals and Customs Agents and Customs Representatives.

• on the other hand, cooperation in the prevention of tax fraud.

However, the analysis of the concept of “cooperative relationship” offered by the OECD would be incomplete if it did not include an essential link in the system, namely the figure of the social collaborator, whose role as intermediary between the taxpayer and the Administration is subject to certain guidelines in this Code.

The proper functioning of the tax system depends largely on ensuring a balance between the rights and obligations of taxpayers and tax authorities, with the role played by tax intermediaries being essential in this regard. Thus, their work is not limited to acting as a representative of the taxpayer, facilitating the knowledge and understanding of their tax obligations and helping to comply with them, but they also establish themselves, thanks to their role as intermediary and advisor to the taxpayer, as an important support for the Tax Agency in one of its most important functions, which is the prevention of tax fraud.

Aware of the important role of these tax intermediaries, a Forum for dialogue between the Tax Agency and the Associations and Colleges of Tax Professionals was created 8 years ago. Among other objectives, the Forum is used to disseminate the criteria of the Tax Agency in the application of taxes and to analyse regulatory changes. It also promotes the role of tax professionals as social collaborators in the application of taxes and the social commitment of these professionals to contribute to the rejection by taxpayers of fraudulent behaviour.

This Forum has represented an important step forward in transforming the traditional position of confrontation between the taxpayer and the tax intermediaries with the Tax Administration, into a relationship of cooperation capable of adopting joint solutions in defence of a higher goal such as the common interest. As a result of this objective, and with the intention of delving deeper into this idea, it is necessary to provide this instrument with a Code of Good Practices for Tax Professionals in which a set of principles and commitments are established to improve the communication process between these collaborators and the Tax Agency.

Therefore, the objective of this document is to propose and propose lines of action that will allow progress in the development of the cooperative relationship model between the Tax Agency and tax professionals, and that will directly impact the generalization of good tax practices by taxpayers with the support and endorsement of these experts.

In this sense, good tax practices are the set of principles, values, norms and guidelines that define good behavior of the tax intermediaries of taxpayers with respect to the latter's tax obligations. To this end, it is necessary to ensure that taxpayers and tax intermediaries have a framework that allows them to understand and share the problems that may arise in the application of the tax system, since, ultimately, this will result in improved legal certainty and lower compliance costs, and will contribute to a reduction in conflict.

Given an attitude of transparency, openness and communication of information by tax intermediaries, the conduct of the Tax Administration must be predictable and provide certainty and legal security to taxpayers in making their tax decisions, hence both parties in the relationship show interest in transparency in tax matters. Furthermore, tax intermediaries will strengthen their reputational added value as a result of adhering to the Code.

This mutual trust will improve the existing relationship between tax intermediaries and the Tax Agency (and by extension taxpayers), with the aim of achieving more efficient management and collection of taxes, as well as significantly reducing tax risk by having at their disposal a mechanism to act with the legal certainty required by a modern Tax Administration.

Finally, the Code of Good Practices for Tax Professionals must include some inspiring principles and commitments that must be assumed by tax intermediaries and the Tax Agency.

II. PRINCIPLES AND COMMITMENTS

The Tax Agency's efforts to improve the cooperative relationship must be aimed at establishing more agile and predictable communication channels with tax professionals, which will undoubtedly make it possible to implement important as legal certainty, trust and mutual agreement. This need has been highlighted on several occasions by members of the Forum of Associations and Colleges of Tax Professionals, who demand greater flexibility, transparency and certainty in the tax system to adapt it to the real needs of taxpayers and, logically, of tax professionals.

Furthermore, the Forum was created with the intention of promoting and facilitating the voluntary compliance of taxpayers with their tax obligations, strengthening the work of tax professionals, who play a fundamental role as social collaborators in the application of taxes. By providing tax and fiscal advisory services, these professionals can decisively contribute to taxpayers rejecting fraudulent conduct and aggressive tax planning practices that illegally tend to avoid or reduce taxation in Spain. In this sense, it is interesting that tax intermediaries assume commitments such as transparency, responsibility and professional ethics in the development of their functions, directing their activity towards compliance with tax obligations by taxpayers as one more aspect in the design and accounting representation of economic operations and rejecting approaches to minimizing tax costs by their clients that are artificial or clearly contrary to tax regulations. For its part, the Tax Administration must ensure the maintenance of a permanent channel of communication that serves to offer legal criteria that provide legal security and certainty.

1. Beginning

   • Voluntariness . Adherence to the Code of Good Practices for Tax Professionals is voluntary, as it arises from the free conviction of assuming a series of recommendations aimed at improving the application of our tax system through increased legal certainty, reciprocal cooperation based on good faith and legitimate trust.

   • Bilaterality . The Code of Good Practices for Tax Professionals contains commitments for both tax intermediaries and the Tax Administration in order to guarantee a balance between the rights and obligations of each of them in the tax field.

   • Transparency and trust , which involves the delivery of information beyond legal requirements, without prejudice to professional secrecy and the obligation of confidentiality. Tax intermediaries must play a leading role in detecting and finding solutions to fraudulent tax practices in order to eradicate them and prevent their spread. For its part, the Tax Agency will ensure that its actions take into account administrative precedents and will ensure the uniform application of the Tax Agency's criteria, for which the dissemination of these plays an essential role.

   • Mutual agreement on the scope and content of the information provided.

   • Collaboration. The effectiveness of the tax system depends on the conduct of taxpayers and tax intermediaries, such as their representatives, and the Tax Agency. Tax intermediaries must collaborate to ensure that the information that taxpayers must provide reaches the Tax Agency correctly. For its part, the Tax Agency must make available to tax intermediaries the necessary information and explanations that may allow the taxpayer to correctly comply with their tax obligations.

   • Confidentiality and privacy of the information provided. Tax intermediaries must respect the authority of the Tax Agency to collect, disclose and retain information when permitted by law, while respecting the limits imposed by the duty of professional secrecy. For its part, the Tax Agency must protect the personal information to which it has access, without disclosing it to third parties, unless provided for by law.

   • Ease of communication , through the establishment of an online channel that allows streamlining the relationship between tax intermediaries, through the Associations and Colleges of Tax Professionals, and the Tax Agency, the possibility of obtaining an appointment, especially in unique or more complex cases.

2. Commitments

   As noted above, the Code of Good Practices for Tax Professionals involves assuming a series of commitments by the parties.

   Certain commitments of the Tax Agency will be effective for tax intermediaries as long as the Addendum to this Code of Good Practices is signed by the Associations and Colleges of Tax Professionals of which they are members or registered.

   By the Tax Intermediaries

   • Adhere to the Code of Ethics, or equivalent instrument, of the Association or College to which you belong.

   • Inform clients to whom advisory services are provided of the need to avoid and prevent any approach that involves a fraudulent or illegal tax and customs practice.

   • Ensure that the actions of its clients are fair and in accordance with current tax legislation, warning them of the illegality of any deceptive, fraudulent or malicious conduct they detect and not collaborating in its execution.

   • Avoid the use of opaque structures in the planning of tax strategies provided in the provision of advice to clients. These are understood as those in which, through the interposition of shell companies located in tax havens or territories that do not cooperate with the tax authorities, they are designed with the purpose of preventing the Tax Agency from knowing who is ultimately responsible for the activities or the ultimate owners of the assets or rights involved. Likewise, the use of shell companies in import or intra-community operations will be considered opaque structures, even when they are not based in tax havens, created or used with the aim of preventing or hindering the Tax Agency from knowing who is ultimately responsible for the operations.

   • Prevent and encourage the correction of client behavior that may cause significant tax risks. Work to fulfil this commitment will be carried out in accordance with the content of the voluntary compliance manual that is established.

   • In the context of the procedures in which the tax intermediary demonstrates its status as a person adhering to the Code of Good Practices for Tax Professionals and its desire to speed up the processing of the procedure and reduce litigation, the tax intermediary will collaborate with the Tax Agency to clarify, as quickly as possible, the controversial issues that are brought to light within the framework of the inspection procedure, attending to the requests for information and documentation that are requested as quickly as possible, and providing all the information that may be relevant to the development of the procedure as quickly and completely as possible.

   • Promote relations with the Tax Agency in electronic format, as well as keep its own and its clients' census data up to date.

   • Disseminate among its clients the use of the instruments provided for in the tax legal system to avoid conflicts.

   • Inform the Association or College, respecting the limits imposed by the duty of professional secrecy, of any irregularities that he or his clients detect regarding alleged widespread fraudulent conduct in a sector that may affect the normal functioning of the tax system or competition in the market.

   • Participate in ongoing training activities that are necessary to update their technical knowledge.

   • Comply with the quality standards established by the Association or College of Tax Professionals to which they belong, using the voluntary compliance manuals that determine the criteria for carrying out their work.

   By the Tax Agency

   • Establish a communication channel on the Tax Agency website, through which Associations and Colleges of Tax Professionals can ask questions under the terms established between both parties.

   • To individualize and personalize the attention given to tax intermediaries adhering to the Code of Good Practices for Tax Professionals, improving the functionalities of the appointment application.

   • Promote the improvement of procedures in order to avoid the need to verify documentation in person and avoid trips to the Tax Agency offices.

   • Without prejudice to the applicable regulations regarding the interpretation and qualification of tax and customs regulations, and the work of information and assistance to taxpayers, the Tax Agency will publish the criteria it applies in its control procedures, especially when significant legislative changes occur, as long as they are susceptible to being applied generally.

   • Improve the application of the tax system, reducing indirect tax burdens, promoting the use of electronic administration in the relations between tax professionals and taxpayers with the Tax Agency, as well as encouraging the use of the instruments established by the tax legal system aimed at reducing conflicts.

   • To guarantee, in the application of the tax system, the full exercise of the rights of taxpayers, as well as those of professionals and other social collaborators in the exercise of their profession and their legally approved regulatory standards.

   • Participate in courses or workshops on topics of interest to tax intermediaries, coordinated through the Associations and Colleges of Tax Professionals and Customs Representatives.

   • Organise outreach and communication campaigns specifically aimed at Associations and Colleges of Tax Professionals adhering to the Code of Good Practices for Tax Professionals, and collect their content in a section of the Tax Agency website.

   • Recognition of tax intermediaries who voluntarily adhere to the Code of Good Practices for Tax Professionals.

   • Analyze requests for unification of criteria submitted by tax intermediaries through Associations and Colleges of Tax Professionals, when they report disparate actions by the Tax Agency in similar procedures.

   • To study, within the Forum's working group, the actions of the Tax Agency reported by the Associations and Colleges of Tax Professionals that deviate from the commitments of the Code of Good Practices for Tax Professionals and to forward them, where appropriate, to the Forum's Plenary Session.

   • Identify tax returns filed by tax intermediaries adhering to the Code of Good Practices for Tax Professionals.

   • Within the framework of the procedures in which the tax intermediary demonstrates its status as a person adhering to the Code of Good Practices for Tax Professionals and its desire to speed up the processing of the procedure and reduce litigation, the Tax Agency will provide the tax intermediary, as soon as possible, with knowledge of the facts that may be regularised, in order to ensure that it has as far in advance as possible all the information that will allow it to carry out the evidentiary activity required in each case to defend its interests. Likewise, and whenever circumstances warrant, meetings will be held to highlight and clarify relevant issues that may have arisen in the course of the procedure.

III. ADHERENCE TO THE CODE OF GOOD PRACTICES FOR TAX PROFESSIONALS

1. Subjective scope of application.

   The Code of Good Practices for Tax Professionals is based on the free adherence of tax intermediaries, who voluntarily assume the principles, commitments and recommendations contained therein.

   This Code has been prepared and approved by the Forum of Associations and Colleges of Tax Professionals to promote a mutually cooperative relationship between the Tax Agency and the tax intermediaries that subscribe to it.

2. Accession procedure.

   The decision of the tax intermediaries to join will be communicated to the Tax Agency, and it will be possible to communicate their withdrawal at any time.

   Adherence and withdrawal must be to the entire Code; partial adherence or withdrawal to specific sections of the Code is not admissible.

   The Tax Agency may provide information on its website about the tax intermediaries that adhere to the Code, provided that it obtains their express consent through the Technical Secretariat of the Forum.

   The creation of a logo to identify tax intermediaries that have adhered to the Code will be studied.

3. Monitoring Commission.

   The Plenary Session of the Forum of Associations and Colleges of Tax Professionals will determine the creation of a Monitoring Committee for the application of the Code of Good Practices for Tax Professionals, composed of six members, appointed equally by the Tax Agency and the Associations and Colleges of Tax Professionals participating in the Forum that have signed the Addendum to the Code. The members of the Monitoring Committee will be appointed annually, with the representatives of the Associations and Colleges of Tax Professionals rotating. The position of President will be held by one of the members appointed by the Tax Agency and that of Secretary will be held by a member from among those appointed by the Associations and Colleges of Tax Professionals.

   The Forum of Associations and Colleges of Tax Professionals is the headquarters where the Tax Agency and the Associations and Colleges of Tax Professionals must study and agree on the inclusion of new matters in the Code and the interpretation of its recommendations. One of the primary objectives of the Monitoring Committee is to present to the Committee the questions of interpretation that it considers appropriate, as well as the opportunity to address new matters, without prejudice to any other initiatives that may assist in the materialization and implementation of the Code. In particular, the Monitoring Committee will establish the treatment practices in cases of non-compliance with the commitments of the Code.

   The Monitoring Committee will meet as a general rule once every six months, without prejudice to the possibility of meeting as many times as deemed necessary by the representatives of the Tax Agency or the Associations and Colleges of Tax Professionals.

   The actions of the Monitoring Committee will be guided by the principles of transparency, mutual trust, good faith and loyalty that govern the Code of Good Practices for Tax Professionals.

   All data, reports or background information of any kind submitted to the Monitoring Committee or obtained by it in the performance of its duties shall be confidential, and its members shall be bound to the strictest and most complete confidentiality regarding them.

   The Monitoring Committee will not be able to take cognizance of specific situations of tax professionals adhering to the Code, and therefore will not be able to intervene in any ongoing tax procedure.