Minutes of the meeting

MINUTES OF THE PLENARY MEETING OF THE FORUM OF ASSOCIATIONS AND
COLLEGES OF TAX PROFESSIONALS
HELD ON JULY 4, 2017

President of the Forum of Associations and Colleges of Tax Professionals

Director General of the State Agency for Tax Administration

Mr. Santiago Menéndez Menéndez

Members representing the Tax Agency

Director of the Tax Management Department

Mr. Rufino de la Rosa Cordon

Director of the Department of Financial and Tax Inspection

Mr. Luis Mª Sánchez González

Director of the Tax Information Technology Department

Mr. Manuel Alfonso Castro Martínez

Director of Legal Services

Mr. Diego Loma-Osorio Lerena

Director of the Planning and Institutional Relations Service

Mr. Ángel Rodríguez Rodríguez

Special Delegate of Catalonia

Mr. Gonzalo David García de Castro

Deputy Director General of Coordination and Management - Collection Department

Mr. Miguel Lorenz Falomir

Deputy Director General of Inspection and Investigation - Department of Customs and II. Excise Duties

Ms. Mª Ángeles Marín Ramírez 

Members representing Associations and Colleges

Spanish Association of Tax Advisors

Director of the Office of Studies

Mrs. Helena Pujalte Méndez-Leite

Professional Association of Accounting and Tax Experts of Spain

Delegate of Madrid

Mr. José Antonio Fernández García-Moreno

General Council of the Spanish Bar Association

Vice Dean of the Balearic Bar Association

Mr. Rafael Gil March

General Council of Colleges of Customs Agents and Brokers

Secretary of the Board

Mr. Manuel Lopez Frias

General Council of Colleges of Administrative Managers of Spain

President of the College of Galicia

Ms. Pilar Otero Moar

General Council of Official Colleges of Social Graduates of Spain

Member of the Fiscal Affairs Committee

Mr. Jose Castaño Semitiel

Spanish Federation of Professional Associations of Tax Technicians and Tax Advisors

President

Ms. Pilar Arxé Fonalleras

Head of the Studies Office

Mr. Jose Luis Carreras Torres

Office of Administrative Managers and Tax Advisors

Lawyer

Mrs. Raquel Cobos Casero

General Registry of Tax Advisors / Registry of Tax Advisor Economists

Vice President of the Board of Directors

Mr. Miguel Angel Ruiz Ayuso

Member of the Board of Directors

Mr. Luis del Amo Carbajo

Technical Secretariat of the Forum of Associations and Professional Colleges

Deputy Director General of External Communication – Planning and Institutional Relations Service

Mrs. Maria Dolores Carreno Beltran

In Madrid, on July 4, 2017, the eleventh plenary meeting of the Forum of Associations and Colleges of Tax Professionals is held, attended by the persons mentioned above, and in accordance with the following

AGENDA

1. Opening by the Director General of the State Tax Administration Agency.

2. Approval of the minutes of the meeting held on July 4, 2017.

3. Information on the topics discussed in the working group.

4. Approval of the Code of Good Practices for Tax Professionals.

5. Other considerations, requests and questions.

I.- In development of the first point of the agenda , the session is opened by Mr. Santiago Menéndez Menéndez, General Director of the State Tax Administration Agency and President of the Forum of Associations and Colleges of Tax Professionals, who after welcoming and thanking everyone present for their attendance, announces that the new Technical Secretary of this Forum is Ms. Mª Dolores Carreño Beltrán, whom everyone knows as she has participated in previous meetings. He goes on to point out that he wants to take advantage of this event to convey to the Associations and Colleges, as always, a clear message of continuity and promotion of the same, as a channel for dialogue and mutual recognition of the work carried out by both the Administration and the social collaborators. On the other hand, the Director General goes on to indicate that, of the topics discussed in the Working Group, which will be dealt with in greater depth in the fourth point of the agenda, he wishes to highlight the advances in cooperative relations and the entry into force of the Immediate Supply of Information ( SII ).

II.- In development of the second point of the agenda , the President of the Forum gives the floor to Ms. Mª Dolores Carreño Beltrán, as head of the Technical Secretariat of the Forum, who explains the process of preparing the minutes of the previous meeting and addresses those present in case they wish to make any observations or comments on them. Since they are not formulated, it declares that the minutes of the meeting of 29 November 2016 are approved and will be published in the space reserved for the Forum on the Tax Agency's website.

III.- In development of the third point of the agenda , Mr. Santiago Menéndez gives the floor to Mr. Rufino de la Rosa Cordón, Director of the Tax Management Department, who, supporting his dissertation with a presentation, begins by presenting the first figures, still provisional, of the 2016 Income Tax campaign. Firstly, he points out that this campaign has had a continuing character in relation to previous years, although a series of innovations have been introduced, of which the following stand out:

• Generalization of Web Income: It can be used by all taxpayers, including those carrying out economic activities.

• First campaign without the PADRE program.

• Improvements in data display and download.

• New procedure for rectification of self-assessments.

• Pilot test: extension of telephone service through “outgoing calls”.

Mr. Rufino de la Rosa goes on to say that the transition to Renta WEB has taken place without incident. He goes on to explain that, in relation to the “outgoing calls” telephone service, it is proving difficult to determine how many taxpayers have completed their declaration through this service, since not all calls ended with the submission. What is being studied for next year's campaign is that the request for an appointment for this service can be made not only online but also by telephone, since, despite the difficulties in measuring its use by taxpayers, there is the impression that the resources that the Tax Agency had allocated to it have not been fully covered.

Regarding the evolution of the campaign, the Director of the Tax Management Department reports that during the campaign the number of declarations has increased compared to the same period in previous years.

Regarding the main results, Mr Rufino de la Rosa points out that almost 23 million taxpayers have accessed one of the help services, although not all accesses have ended with the presentation of the declaration, since many users have used the help services to see if they were obliged to do so, to consult data, etc. He goes on to highlight the preponderant role, as in previous years, of the reference number, with more than 21 million users, compared to the million and a half represented by the electronic certificate and Cl@ve PIN. He adds that the reference number has also been obtained mainly through box 490 (more than 20,000,000). Below, the Director of the Tax Management Department provides the main data of the campaign, although reiterating its provisional nature:

• Statements submitted: increased by 2.4% compared to the previous year.

• Declarations to be entered: They increased by 24% and their amount by 23%, although these percentages will probably decrease, as occurred last year due to a delay in the information arriving from financial institutions.

• Returns requested: have been reduced by 3% and their value by 8%. The Tax Agency had forecast an increase of 1% and 2% respectively.

• Paid returns: There has been a faster payment of refunds, since, although the number of refund requests and the amount is lower than in the previous year, at this time more than 11 million refunds have been made for an amount greater than 6.8 billion euros, which represents increases of 2.6 and 0.9% respectively.

Regarding the form of presentation of the declarations, D: Rufino de la Rosa points out that the number of taxpayers who choose the Internet is increasing slightly (almost 90%), compared to other methods such as telephone assistance or the offices of the Tax Agency.

Finally, the Director of the Tax Management Department points out that the increase in electronic filing and the anticipation of the Income Tax campaign have had the effect of bringing forward the filing of their tax returns for taxpayers. Thus, comparing the data from this campaign as of 31 May with those from the same period in 2010, an increase of more than 43% in the number of declarations submitted is noted, which has allowed the Tax Agency to increase the amount of requested refunds paid by 35%.

The President then opens the floor for the floor.

The following spoke: Ms. Pilar Arxé, President of the Spanish Federation of Professional Associations of Tax Technicians and Tax Advisors, who first congratulated the Tax Agency for the 2016 Income Tax campaign. He goes on to point out that in this exercise, with the reference number of a taxpayer, they have been able to access data from the previous year, which has been of great help to tax professionals when making adjustments. For this reason, the Court requests that, with the reference number for the current year, data for years that have not expired can be accessed, since sometimes more years need to be regularised and the Income Tax campaign is a good time to do so. Next, regarding the rectification of self-assessments, he also requests an effort on the part of the Tax Agency, since at this time it can only be done through Renta WEB and not through commercial programs, which is a disadvantage for them. He continued his intervention by requesting the AEAT that, in its meetings with financial institutions, as social collaborators that they are, although with certain privileges, they point out the obligation to have their computer systems adapted in order to be able to obtain the NRC when the payment could not be domiciled, avoiding, as has happened this year with a client, that he has to visit several branches of a bank in order to locate his NRC .

Finally, the FETTAF representative asked whether it was known what percentage of the 87.8% of declarations submitted online had been processed through social partners.

Mr. Rufino de la Rosa Cordón takes the floor and, regarding the last question, points out that he does not have the information at this time.

Mr. Rufino de la Rosa goes on to point out that, in relation to the question raised about the reference number, it must be pointed out that its configuration has indeed been modified so that the data for 2015 can be accessed with the reference number for the current year. He added that in the 2017 Income Tax campaign it is planned that with the reference number it will be possible to access 2016 and 2015, and thus progressively, the number of years that can be accessed with the reference number of the current campaign will be increased. The possibility of changing the configuration of the reference number to allow access to previous non-prescribed exercises was studied and assessed, but for reasons of efficiency in the use of resources, this formula has been designed which will successively increase the number of exercises that can be accessed.

Regarding the new procedure for correcting self-assessments, he points out that this is a highly complex project, which is why it has been decided to start it with Renta WEB. However, once its correct operation is confirmed and the procedure is consolidated, the integration of it into the software programs of commercial operators will be addressed as a line of improvement.

Finally, the Director of the Tax Management Department indicates that the statements made by Ms. Pilar Arxé in relation to the NRC will be communicated to financial institutions.

Mr. Miguel Lorenz Falomir, Deputy Director General of Coordination and Management, takes the floor to request the tax professionals present at the meeting that any incident such as the one discussed in relation to the NRC be brought to the attention of the Tax Collection Department.

Next, Mr. Rafael Gil March, Vice-Dean of the Balearic Bar Association and representative of the General Council of Spanish Lawyers, takes the floor. After expressing his congratulations on the Income Tax campaign, he asks whether there has been any progress on the issue, already raised in the previous plenary session, of land registry regularisations, since providing a permanent solution to these incidents would help to avoid a lot of work for both tax professionals and the Tax Agency.

Mr. Rufino de la Rosa replies that there has been no progress in this area, since the Tax Agency can only transfer incidents that occur during the campaign to the General Directorate of Cadastre, but regularization is its responsibility. However, he adds that with a view to next year's Income Tax campaign, the configuration of which is currently being designed, a formula could be studied to channel incidents of this type that occur during the campaign.

Next, Mr. Santiago Menéndez Menéndez intervenes, who, after expressing the Tax Agency's satisfaction with the Income Tax campaign and the extension of Renta WEB to all taxpayers, clarifies that the tests that taxpayers carry out with their data in the Electronic Office are not reflected nor will they be used later, since only the final declaration is recorded.

IV.- In development of the fourth point of the agenda , the President gives the floor to Mr. Ángel Rodríguez Rodríguez, Director of the Planning and Institutional Relations Service, who explains that the Working Group of this Forum has met on two occasions during the first semester and that its fundamental activity has consisted of agreeing on a document that includes a code of good practices for tax professionals, which he will briefly comment on. Firstly, it indicates that the draft code has been prepared taking into account the observations and comments received from social collaborators, and that its objective is to advance the model of cooperative relationship between the Tax Agency and Associations and Colleges, also integrating tax intermediaries as a fundamental element to generalize good tax practices among taxpayers. He goes on to point out that the document contains a series of principles such as the voluntary nature of adherence to the code by going beyond regulatory compliance, the bilateral nature of the commitments to be assumed, transparency and trust between the parties, collaboration to achieve an effective tax system, confidentiality and privacy of the information provided, given the confidentiality of tax data included in the General Tax Law and the duty of professional secrecy, and ease of communication, facilitated by the greater mediation produced by the widespread use of electronic media. Mr Ángel Rodríguez goes on to say that the document also includes a series of commitments to be assumed by the parties. Highlights the following:

On behalf of the Associations and Colleges:

• Have a Code of Ethics that is mandatory for its members, which provides mechanisms to correct serious breaches by its members, such as convictions in a final judgment for crimes against the Public Treasury.

• Have voluntary compliance manuals to be adopted by both its members and its clients, containing verification of conduct contrary to the legal system, such as the existence of double accounting, the interposition of legal entities, opacity of corporate structures, use of cash exceeding legal limits, etc.

• Carry out tax training and updating tasks and promote the use of the instruments provided for in the legal system to avoid conflicts, such as consultations, prior valuation agreements or minutes with agreements.

• Promote the use of new technologies and electronic formats in relations with the Administration.

For tax intermediaries:

• Provide advice within tax and customs laws and ensure that the actions of its clients comply with the legislation.

• Avoid the use of opaque structures in tax strategy planning.

• Prevent and, where appropriate, correct the conduct of its clients that is aimed at causing significant tax risks, for which the content of the voluntary compliance manual established by the association or professional college will be applicable.

• Promote relations with the Tax Agency in electronic format.

• To inform the Association or College of any significant irregularities detected by members or their clients regarding widespread fraudulent conduct in a sector that affects the normal functioning of the tax system or competition in the market.

On behalf of the Tax Agency:

• A specific communication channel will be established on the AEAT website where Associations and Colleges can ask different questions, especially those related to the application of taxes in cases of significant legislative changes.

• The criteria that may be applied generally will be published.

• The use of instruments provided for in the legal system aimed at reducing conflict will be encouraged.

• Training activities will be carried out in both the tax and civic-tax education areas, in order to generate an educational culture of tax compliance.

• The use of electronic administration will be encouraged.

• There will be recognition for associations, colleges and tax intermediaries that adhere to the Code.

Mr. Ángel Rodríguez goes on to explain that other issues have also been discussed at the meetings of the Working Group, of which the following stand out:

• Corporate Tax Campaign: bringing forward the date of publication of the Ministerial Order to April, that of the manual to May and that of the aid program to July, although the companies of software They were able to use it since June in order to carry out tests and adaptations.

• Models 05 and 06: The Tax Agency's project to simplify the electronic submission and processing of these forms relating to the Special Tax on certain means of transport was reported.

• SII : The effort made by the Tax Agency in dissemination tasks was noted, with the establishment of a specific email for tax and technical queries and a document of frequently asked questions that is constantly updated. It was also indicated that the Ministerial Order would include the technical specifications. Likewise, for those subject to REDEME , it was clarified that with the presentation of form 340 the obligation to provide information for the first semester was understood to be fulfilled. Finally, a message of reassurance was sent to companies, stressing the absence of any intention to impose sanctions on the part of the Tax Agency in this first phase, which will be characterised by flexibility in terms of the quality of the data supplied.

The Director General of the Tax Agency then asks if anyone else wants to speak.

Ms. Pilar Arxé took the floor and expressed her satisfaction with the fact that work is being done on developing a code of good tax practices for professionals, as she considers it a major step forward in recognizing the work of social collaborators and their relations with the Administration.

Mr. Santiago Menéndez intervened and stated that the progress made in cooperative relations is a matter of mutual congratulations, since, as he has said on previous occasions, it is of the utmost interest for the Tax Agency to make progress in this area in all areas.

He continued his intervention by pointing out that, as regards the SII a huge field of work has opened up in relation to all those taxpayers who are not obliged to do so, but who could nevertheless benefit from all the advantages that this system provides, such as fluidity in relations with the Administration and the consequent elimination of indirect charges. He added that agreements are being signed so that social collaborators or third parties can carry out the presentation and management of the SII of the taxpayers.

Next, Mr. Santiago Menéndez gives the floor to Mr. Gonzalo David García de Castro, Special Delegate for Catalonia, who adds that in recent months a very significant number of social collaboration agreements have been signed for the fulfillment of all formal and material obligations linked to the SII by companies, normally, in the information technology sector. He goes on to point out that a multitude of dissemination activities have been carried out and that the reception has been good on the part of a large segment of taxpayers accustomed to working in social collaboration environments, for whom the fact of going to a technological entity with a signed agreement to comply with the obligations derived from the SII , makes their day-to-day operations much easier. Regarding REDEME , the Special Delegate points out that the losses have not been very significant from the billing point of view. He goes on to indicate that in the Special Delegation of Catalonia approximately 225 million euros are returned per month for VAT and that with the application of the SII companies They have commented that returns are being expedited.

At this point, the Director General of the Tax Agency intervenes to add that, although the implementation of SII has some initial costs due to the reorganization of the company's operations and its internal practices, the advantages that it will bring must be highlighted, since the automation of the invoice sending processes means having the information in an organized manner and close in time to the moment of carrying out the operations, which contributes positively to business decision-making. On the other hand, Mr. Santiago Menéndez points out that the SII has not emerged with a controlling spirit, but rather its philosophy has always been to get the most out of the application of new technologies, an area in which the Tax Agency has been a pioneer, and that with the automation of tasks at a closer time, discrepancies will be reduced and, consequently, the requirements for companies to carry out checks.

He ends his speech by pointing out that the Tax Agency is very interested in disseminating the advantages of SII among non-obligated taxpayers.

Next, Mr. Rufino de la Rosa Cordón takes the floor to state that the SII has moved on to a second phase with its entry into force, in which all existing communication channels will remain open and, in addition, all incidents that may arise will have to be resolved. He adds that in the two business days that the SII has been in force, more than two million invoices have already been received, and that we will have to wait until July 13, the first day of the deadline, to see the total figure. On the other hand, he points out that the pilot test has developed quite well, with around 20,000 participating companies and almost 230 million invoices in the week before the start. The website will also be launched with a virtual interactive assistant to answer technical and tax queries in real time, as well as a tool to calculate deadlines for sending invoice records. On the other hand, he comments on the dissemination efforts carried out in the different areas and which are expected to decrease somewhat, although the Tax Agency is aware that it has to continue providing its support in a process as complex as the SII and the organizational adaptations it requires. The Director of the Tax Management Department adds that the SII since its inception in 2014 has been adapting its wording in order to accommodate the suggestions received that were considered reasonable, but what has always been maintained is the underlying philosophy of immediacy and validation. He adds that companies have also made a great effort and have refined their censuses, meaning they now have better quality information.

Finally, and linking with what was commented by the General Director, Mr. Rufino de la Rosa points out that a new figure of social collaborator has appeared, since the companies of software plantearon la posibilidad de actuar como transmisores de la información en el SII. Así, las empresas de software They may act independently or through other social collaborators, since, although they may be responsible for sending invoices, they are not authorized to submit form 303. He goes on to say that a taxpayer will normally prefer to have a professional who can provide comprehensive assistance, and this is where tax professionals will have to make their adaptations to this new form of relationship.

Next, Mr. Rafael Gil March takes the floor and asks whether social collaborators have to sign a new agreement or simply have to contract the software with an IT company.

Mr. Ángel Rodríguez Rodríguez, Director of the Planning and Institutional Relations Service, answers that it is not necessary to sign a new agreement and that it is only necessary to have the software necessary.

Mr. Rafael Gil March takes the floor again to point out that it is a great responsibility for social collaborators to encourage their clients to voluntarily join the Immediate Supply of Information, and that some kind of recognition of their work within the code of good practices that is being drawn up would be desirable.

Mr. Santiago Menéndez Menéndez then intervenes, indicating that it would be desirable for tax professionals to carefully study the SII and raise any doubts they may have regarding it, since, among other things, the voluntary incorporation of a taxpayer into this system demonstrates a clear interest in being transparent in their economic activity. Furthermore, one of the advantages of SII is that it prevents unintentional errors from being made, which means less work for the Administration and prevents inconvenience to the taxpayer. The Director General goes on to insist that the Tax Agency has opened various communication channels, both through the website and by email or through the Technical Secretariat of this Forum, to make known the advantages of the SII to compliant taxpayers and to resolve any doubts that may arise in relation to it. On the other hand, Mr. Santiago Menéndez adds that it is becoming clear that adaptation to SII is easier for companies that have made intensive use of new technologies. Finally, it clarifies that from 1 January 2018 the deadline for submitting the information will be four days.

Next, Mr. Rufino de la Rosa takes the floor to reiterate that this semester we will begin working with the SII with the flexibility that has already been mentioned, since it is understandable that at first we have to adjust mechanisms in order to improve the quality of the information. He also insists that with the SII both the Administration and companies will have validated information in real time.

Mr. Luis del Amo Carbajo, Technical Secretary of the General Registry of Tax Advisors / Registry of Tax Advisory Economists, takes the floor and asks what exactly a social collaborator has to do to manage the SII of a client, whether because the client is obliged to do so or because he or she wants to do so voluntarily.

The Director of the Tax Management Department answers that the Agreement enables them to manage the SII and the only thing they have to do is provide themselves with the technical requirements. Regarding the latter, he reports that there are a variety of commercial programs and each office will have to choose the one that best suits its organization. Thus, and since the SII basically consists of the electronic supply of the billing records that make up the VAT Registry Books , the collaborator social organization that is in charge of keeping the accounting can also be in charge of sending the details of the invoicing electronically to the Tax Agency (through web services based on the exchange of XML messages, or, where appropriate, through the use of a web form ), with whose information the different Registry Books will be configured, practically in real time. In addition, the Tax Agency will offer contrast data from the billing records supplied, making available to the taxpayer the information obtained from those clients and suppliers who apply the SII . In this way, the system will constitute an assistance tool in the preparation of declarations-settlements for VAT .

At that moment the Director of the Tax Information Technology Department intervenes to emphasize that the SII implies a “machine to machine” communication through computer programs that commercial distributors of software have designed. In this “machine to machine” dialogue, any anomaly or error is detected in real time, allowing for rapid correction.

Next, Mr. Miguel Ángel Ruiz Ayuso, Vice President of the Board of Directors of the General Registry of Tax Advisors / Registry of Tax Advisory Economists, takes the floor and, in relation to the code of good practices, asks if there is any planned timetable.

Mr Ángel Rodríguez replied that it would probably be possible to approve it at the second plenary session of this Forum, which is expected to take place in November. The Director of the Planning and Institutional Relations Service adds that the work is well advanced and requests that any suggestions be forwarded to the Technical Secretariat as soon as possible. He also noted that if any significant issue arises and is deemed appropriate, the necessary meetings would be held during the second half of the year to discuss it.

Next, Ms. Pilar Arxé intervenes and asks about the penalty regime applicable to those who do not submit Form 720 or those who submit it late.

Mr. Santiago Menéndez Menéndez replied that the Tax Agency will continue to apply the existing sanctioning regime and that, nevertheless, as has already been stated in other plenary meetings of this Forum, the sanction is not imposed automatically and the case law is very broad. He added that the number of taxpayers to whom the consequences derived from article 39.2 of the Personal Income Tax Law have been applied is very small. Finally, he points out that the Tax Agency will abide by any future ruling by the European Commission, as it has done on previous occasions.

V.- In development of the fifth point of the agenda , the President of the Forum addresses those present and opens the floor. There were no further statements, and he thanked everyone for their attendance and participation, and closed the eleventh plenary session of the Forum of Associations and Colleges of Tax Professionals.