Minutes of the meeting

MINUTES OF THE PLENARY MEETING OF THE FORUM OF ASSOCIATIONS AND
COLLEGES OF TAX PROFESSIONALS
HELD ON NOVEMBER 28, 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 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 the Planning and Institutional Relations Service

Mr. Ángel Rodríguez Rodríguez

Deputy Director General of Coordination and Management - Collection Department

Mr. Miguel Lorenz Falomir

Deputy Director General of Management and Intervention of Special Taxes – Customs Department and II. EE.

Mr. Vicente Cillero Martinez

Area Coordinator of the General Subdirectorate of Tax Technique - Tax Management Department

Mrs. Mercedes Jordán Valdizán

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

Legal Counsel of the Legal Services Department of the Council

Mr. Gonzalo Antonio Arana Azparren

General Council of Colleges of Customs Agents and Brokers

Chairman of the

Mr. Antonio Llobet de Pablo

Secretary of the Board

Mr. Manuel Lopez Frias

General Council of Colleges of Administrative Managers of Spain

Counsel to the Council

Mr. Nicolas Perez Hernandez

General Council of Official Colleges of Social Graduates of Spain

Member of the Fiscal Affairs Committee

Mr. Jose Castaño Semitiel

Member of the Fiscal Affairs Committee

Mr. Jose Ruiz Sanchez

Spanish Federation of Professional Associations of Tax Technicians and Tax Advisors

Chairperson

Mr. Joan Torres Torres

Deputy to the Presidency

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

Member of the Board of Directors

Mr. Jesus Fernandez-Bravo Pinto

Member of the Board of Directors

Mr. Luis del Amo Carbajo

Technical Secretariat of the Forum of Associations and Colleges of Tax Professionals

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

Mrs. Maria Dolores Carreno Beltran

In Madrid, on November 28, 2017, the twelfth 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 was 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, pointed out the importance of this plenary session, since the final text of the Code of Good Practices for Tax Professionals will be put to a vote, to which technical improvements have been incorporated derived from the observations provided by both the Tax Agency and the Associations and Colleges. In addition, and with regard to the doubts raised by some representatives, he recalled that this is a voluntary instrument of adhesion and that, in addition, it will be modified and perfected over time and will imply recognition and differentiation of the entities that adhere to it compared to those that do not. On the other hand, he announced that item 5 of the agenda will provide information on the most important projects planned by the Tax Agency in the medium term.

The Director General continues by conveying to the Associations and Colleges that make up this Forum the renewal of the Tax Agency's commitment to it, as it has become an excellent channel of communication. He went on to point out that, in this regard and in developing this spirit of collaboration, during the second half of 2017 the working group of this Forum met on one occasion, on 7 November, to discuss various issues that will be presented in detail in the third point of the agenda. The main issue was the Cooperative Relationship, also analysing the draft European Union Directive for tax intermediaries to provide information on cross-border tax planning in certain cases and the changes in information declarations planned for 2018.

II.- In development of the second point of the agenda , the President of the Forum gives the floor to Ms. Mª Dolores Carreño Beltrán, head of the Technical Secretariat of the Forum, who states that the minutes of the 11th plenary session were sent to the Associations and Colleges with the call for this meeting and that no comments have been received to date. He then addresses those present in case they wish to make any comments or observations on the matter. Since they are not formulated, it declares that the minutes of the meeting of July 4, 2017 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. Ángel Rodríguez Rodríguez, Director of the Planning and Institutional Relations Service, who explains that, as the General Director has already announced, the Working Group of this Forum met on November 7 and its activity was focused on the following topics:

• The first item on the agenda dealt with the issue of the cooperative relationship, based on the draft Code of Good Practices for Associations and Colleges of Tax Professionals, which was prepared taking into account both the observations and comments received from the Associations and Colleges, as well as the issues discussed at the previous meeting of the Working Group last June. Specifically:

  • The specific mention of Customs Agents and Customs Representatives has been included in the text of the Code;

  • The concept of “aggressive tax planning practices” has been qualified as those that illegally tend to avoid or reduce taxes;

  • Respect for the limits imposed by the duty of professional secrecy on the information provided has been stressed; and

  • The possibility of creating a logo to identify the Associations and Colleges of Tax Professionals, as well as tax intermediaries, that have adhered to the Code has been introduced.

  The meeting also highlighted the need for an improvement in the accession mechanism so that it would be clear whether it affected the association or a partner. In relation to this point, Mr Ángel Rodríguez points out that it has been clarified in the current version of the draft.

  Furthermore, and in relation to the doubts raised by some Associations about the advantages that they could obtain in the event of adhering to the Code, the Tax Agency recalled its voluntary nature, which should be assessed by each Association or College and its members, and which would also be open to other Associations and Colleges that were not part of the Forum. In any case, it would be a living document, which would be refined and specified, and which would represent a recognition and differentiation from those Associations and Colleges that did not adhere.

  The draft European Union Directive requiring tax intermediaries to provide information on cross-border tax planning in certain cases was then discussed.

• In the second point of the agenda, the Deputy Director General of Tax Technology reported on the changes planned for 2018 in the information declarations:

  • In Form 181 (Informative declaration of loans and credits, and financial operations related to real estate) the information derived from the refund of interest due to the cancellation of floor clauses is modified, to differentiate the amounts that are taxable from those that are not.

  • Form 187 (Informative declaration regarding income or capital gains obtained as a result of the transfer or reimbursement of shares and interests in Collective Investment Institutions and the transfer of subscription rights) includes the sale of subscription rights acquired in the primary market, while the sale of subscription rights acquired in the secondary market for their subsequent transfer is declared in Form 198.

  • In form 193 (Informative declaration on withholdings and payments on account of IRPF on certain income from movable capital) technical modifications are introduced to differentiate the income that must be integrated into the General Taxable Base and that which goes to the Savings Taxable Base.

  • The deadlines for filing forms 171, 184 and 345 are brought forward to January of each year, coming into force in 2018. Finally, the deadline for filing Form 347 is brought forward to January, but its entry into force is moved to 2019 (compared to operations carried out in 2018).

  • Form 190 is modified to include all amounts paid to the same recipient in the form of grants exempt from Article 7.j) of the Personal Income Tax Act, even if their amount does not exceed 3,000 euros, thus combining this type of exempt income in a single informative declaration form.

  Regarding changes to other declarations, a section with telephone numbers and email addresses for receiving information notices is created in form 030, and specific fields are enabled in forms 036 and 037 to notify successors when deregistering from the Census of Business Owners, Professionals and Withholders.

The Director of the Planning and Institutional Relations Service continued his presentation by pointing out that, in relation to the Code of Good Practices for Tax Professionals, it was also mentioned at the meeting that, following its approval, the Code would have to be supplemented, so that issues such as, among others, the consequences of serious and repeated non-compliance and the more precise definition of the adhesion mechanisms would be defined. In this regard, Mr. Ángel Rodríguez proposes that companies send the Tax Agency the issues they consider to be priorities in order to begin this work in February 2018.

IV.- In development of the fourth point of the agenda , “Approval of the Code of Good Practices for Tax Professionals”, the President begins his presentation by pointing out that this Forum was born in 2011 with the aim of creating a meeting place where Associations and Colleges of Tax Professionals and representatives of the Tax Agency could discuss suggestions and proposals, advancing social collaboration, strengthening legal security in the relationship between taxpayers and advisors and the Tax Agency and making explicit the commitment of all to the prevention and fight against tax fraud. Mr. Santiago Menéndez went on to point out that the Code that is intended to be approved in today's plenary session represents a further step forward in strengthening a relationship that has been gaining in fluidity and which will undoubtedly bring great benefits to both parties. He added that the objective of the Code is to improve, among all, the application of our tax system, making effective such important principles as legal certainty, trust and mutual agreement. Furthermore, the Code assumes the assumption of principles that must govern the relationship between both parties and of commitments that make these principles effective. Thus, both the Associations and Colleges of Professionals and the tax intermediaries that comprise them will assume commitments to transparency, responsibility and ethics in the development of their functions. For its part, the Tax Agency will undertake to ensure the maintenance of a permanent channel of communication that makes it possible to offer legal criteria that provide legal security and certainty. Mr. Santiago Menéndez goes on to reiterate that the Code is a voluntary instrument, with respect to which each Association or College and its members must assess their adherence to it, and its opening to other Associations and Colleges that are not part of the Forum is planned. He added that the Code of Good Practices should serve as the basis for the cooperative relationship and that it will have to be developed and made concrete through mutual effort.

The Director General of the Tax Agency then addressed the audience before proceeding to approve the Code, expressing his gratitude for the work and effort carried out in recent months by all members of this Forum, which will mark the beginning of a new stage in the collaboration between both parties. He added that he believes that the text of the Code of Good Practices for Tax Professionals agreed upon, without prejudice to subsequent developments, is to the satisfaction of the majority of participants in this Plenary Session.

Mr. Santiago Menéndez then submitted the Code of Good Practices for Tax Professionals to the Plenary for a vote, indicating that anyone who wishes to do so may present their objections or suggestions.

Mr. Luis del Amo, representative of REAF – REGAF, took the floor and explained that the group he represents needs to carry out an internal debate process before approving the Code, since they must analyze whether their codes of ethics are appropriate to its content.

Next, Ms. Helena Pujalte, representative of AEDAF, intervened, pointing out that her objections are in line with those expressed by Mr. Luis del Amo, but that, in addition, the final wording of the text in some points does not seem desirable to her. He goes on to state that his Association provided a series of corrections, most of which have been incorporated into the final text of the Code, something for which he is grateful to the Tax Agency, but that, nevertheless, some issues, which in his opinion are important, have not been included. He points out that, for the reasons stated above, they cannot approve the Code.

Ms. Raquel Cobos Casero, representative of GESAF, took the floor and stated that her Association was abstaining because they had not had enough time to obtain the authorization of its Executive Council.

Mr. Ángel Rodríguez then intervened to comment that, without prejudice to the observations made by those present, it is necessary to differentiate between the approval of the Code, taking into account that its content will be complemented by the work of all, and what would be a future adhesion, which would be voluntary and for which, logically, some reflection may be necessary.

Ms. Helena Pujalte intervenes again to clarify that it is only one of the suggestions they made and that it has not been included in the text, which prevents them from approving the Code in its current version, since it concerns them.

Next, Mr. Santiago Menéndez submitted the Code of Good Practices for Tax Professionals to a vote by the Plenary Session, obtaining a favorable vote from the majority, with the abstention of GESAF and the vote against of AEDAF and REAF-REGAF.

The Director General of the Tax Agency then opened the session for speeches.

Ms. Helena Pujalte takes the floor to indicate that the point with which they disagree is in section “II. PRINCIPLES AND COMMITMENTS”, where in its second paragraph it says verbatim “(…) In this sense, it is interesting that, through their Associations and Professional Colleges, tax intermediaries assume commitments such as transparency, responsibility and deontology in the development of their functions, directing their activity towards the consideration of compliance with the corresponding tax obligations by taxpayers as one more aspect in the design and accounting representation of economic operations and rejecting potentially illicit approaches to minimizing tax costs by their clients. . He points out that his Association had suggested the elimination of the word “unlawful” and that what has happened is that in the final text it has not only not been eliminated, but “potentially” has been added, resulting in a wording that seems interpretable to them. Their proposal had been “… and rejecting approaches to minimizing the tax cost by their clients. ”

The President of the Forum then asks the REAF representatives if their objection is the same as that raised by AEDAF.

Mr. Luis del Amo answers that they do not want to put their associates in the position of having to verify a series of data about their clients that they are not clear about and that, in addition, those who decide not to adhere in order not to commit to carrying out verifications, are in some way singled out by not appearing on the list of those adhering to the Code. He clarifies that his objections are not to the wording of the text.

The Director General of the AEAT intervenes again and points out that the cooperative relationship, understood in a generic way, is a necessary future path in which the work of social collaborators as representatives of taxpayers is extremely important in all aspects, both in terms of control and assistance and help. He goes on to point out that the Code represents a firm commitment by the Tax Agency to transparency and coordination of criteria in all territorial areas of action, promoting greater legal certainty. Furthermore, it is a permanent commitment over time, so that any incidents or conflicts that arise are resolved for the most part through the communication channels that are established. He goes on to point out that, when he took over the management of the Tax Agency, he thought that it was the Administration that would put up the greatest resistance to changes in the cooperative relationship and that, however, what he has found is little external help in this task. For this reason, we are grateful for the support of the Associations and Colleges that see the Code of Good Practices for Professionals as a way of advancing cooperative relations. He also points out that this is a matter that is difficult to explain in the media, so all progress, whether in this area or in the Large Business Forum, must be made in a regulated manner, in writing and with the greatest possible transparency, so that no doubts are generated regarding the actions of the Administration. He goes on to say that, as a result of new technologies and advances in globalisation, the amount of information handled by the Administration, taxpayers and tax advisors has increased and, as a result, the cooperative relationship is positioned as the best way to try to prevent conflicts that may arise in the interpretation of facts and regulations, before incidents occur, which means greater legal security and provides confidence in economic activity, always leaving, of course, the possibility of going to court in the event of discrepancies. Therefore, progress in cooperative relations implies an increase in transparency, legal certainty and coordination of the criteria applied by the Administration, which may or may not be shared and, in this case, challenged in court.

V.- In development of the fifth point of the agenda , the President of the Forum indicates that he wants to briefly present the strategic planning of the Tax Agency in the medium term, 3 or 4 years, and points out that in this, social collaborators can play a very important role. It begins by indicating that the Immediate Supply of Information (SII) has meant for the Tax Agency a new form of relationship with the taxpayer that is much more flexible, transparent and indirect. He adds that its implementation has been difficult, but, even so, there has been a saving of 10 million euros per year. He goes on to point out that the Tax Agency is aware that changes are difficult, even if they are explained and the advantages of them are appreciated, and that it has meant a significant effort for companies, which have also had to rethink their billing, accounting and internal communication processes, but that, finally, they have been able to verify that this rethinking of their internal processes has resulted in greater efficiency in the management of their resources. It has therefore been very gratifying that at the last plenary session of the Large Business Forum held on the 21st, entities that were very reluctant to implement the SII have expressly congratulated the Tax Management Department for the flexibility, adaptability and support mechanisms with which the implementation of the new system has been developed. Thus, one of the strategic lines that will be addressed in the medium term will be a change in the relationship between the Administration and the taxpayer, either directly or through its representative, and to make assistance and help more flexible, more mediated and more direct, and this, fundamentally, through three channels:

• Continue to improve the services offered by the Tax Agency website through artificial intelligence. These are virtual assistants that, through a question and answer mechanism, guide taxpayers in an agile and friendly way until they find the information they are looking for, during a longer schedule than that available through telephone or in-person assistance at an Administration office, which in personal terms means greater time efficiency.

• Reduce the need for taxpayers or their representatives to go to the offices of the Tax Agency to carry out their procedures. To this end, in addition to artificial intelligence, further development of assistance via telephone platforms is being studied to avoid travel and, consequently, also save time.

• A more direct, agile and flexible procedure for providing assistance and support to social partners who adhere to the Code of Good Practices is being considered.

The Director General of the Tax Agency then points out that another of the medium-term strategic plans is to develop a change of mentality in the media and social perception of the fight against tax fraud, explaining how this activity is carried out. At the moment, it is measured by quantitative results and, in this regard, it should be noted that, although the current figures refer to the years of greatest economic crisis, the results have been the best in the history of the institution, and have been achieved with a smaller number of personnel. Mr. Santiago Menéndez reiterates that the fight against fraud is currently measured by the income obtained or by the reduction in refunds made, that is, results are measured that do not discriminate whether, for example, they are the result of a liquidation made to a large company due to a disagreement with the Administration in the application of a criterion or the result of an investigation that culminates in the emergence of an underground economy. In this way, beyond the numerical data, the Tax Agency intends to carry out an informative task on how to fight against tax fraud, explaining the reasons that motivate the inclusion in the inspection plans of certain sectors of activity, such as companies that have businesses in tax havens, taxpayers who may have corporate structures tending to the opacity of their assets or income, aggressive tax planning, etc. That is to say, it is a matter of explaining the inspection and control activities, since a liquidation due to an interpretative issue is not the same as one derived from an investigation aimed at uncovering assets that until now were opaque to the Administration.

The President of the Forum goes on to point out that it is currently difficult to distinguish between when the Tax Agency's activity is assistance and help or control. For example, the SII has been a project in which assistance and help have been combined with control. It provides a significant amount of information that allows control activities to be automated, which also allows more resources to be allocated to other actions. The changes to the deadlines for submitting certain information declarations already mentioned in this meeting are in line with this. The aim is for the Tax Agency to have access to the information as soon as possible, since it has an impact on other campaigns, such as the Personal Income Tax campaign. If this campaign is to be brought forward and the quality of the services provided to be improved, it is necessary to have access to the information included in the informative declarations.

Finally, Mr. Santiago Menéndez reiterates what has already been said, that one of the medium-term objectives will be the transformation of the way the Tax Agency relates to taxpayers, where the cooperative relationship will play a very important role, and encourages the Associations and Colleges that still do not see this path very clearly as a means of advancing in transparency and legal certainty, to reflect on the matter.

The Director General then opens the floor for the floor.

Firstly, Mr Antonio Llobet, representative of the General Council of Customs Agents and Brokers, asks whether the Administration is working on a future anti-fraud law.

Mr Santiago Menéndez takes the floor again and replies that at this time there is no specific project to combat fraud. He goes on to say that the current parliamentary situation also requires consensus in order to move forward with any regulatory project. He adds that, on the other hand, some of the projects he has discussed in this session will indeed require regulatory development, but that they are more oriented towards compliant taxpayers and achieving changes in the relationship with taxpayers so that it is faster, more flexible and closer to the moment of carrying out the economic activity.

Mr. Antonio Llobet then explains that the group he represents has been demanding a customs law for some time now, since in terms of tax collection they see a disconnect between the Union Customs Code ( CAU ) and the General Tax Law. He asked if there was any progress on this issue.

Mr. Vicente Cillero Martínez, Deputy Director General of Management and Intervention of II. EE. of the Customs and Excise Department, takes the floor and reports that work is being done to adapt CAU to Spanish regulations but that, at the moment, nothing has been specified.

Mr. José Ruiz Sánchez, representative of the General Council of Official Colleges of Social Graduates of Spain, took the floor and explained that social workers are very sensitive to the fight against tax fraud and the underground economy, since it is an issue that, like the rest of society, directly affects them. He adds that he is happy with the controls carried out by computerised data crossing, but that he would like to know whether the Tax Agency also carries out field work.

Mr. Santiago Menéndez intervenes again and points out that the problem with the Tax Agency's activity in the fight against fraud is that, as a consequence of article 95 of the General Tax Law, information relating to a specific taxpayer cannot be provided, so that if, for example, a news item appears in the press, explanations cannot be given regarding the actions carried out throughout the procedure, so the different nature of the activities that have been carried out is not revealed. He adds that the National Fraud Investigation Office carries out investigative work outside of the automated ones and has very diverse sources of information, from complaints to field work, where many entries and searches are made with judicial authorization, the result of intensive prior work that provides consistency to the inspection work.

Next, Mr. José Ruiz Sánchez intervenes again, requesting that social collaborators be accredited as such, which would allow them, especially at certain times when they have to go to the Tax Agency offices very frequently, more direct and quick access so that they do not waste so much time. He adds that he is referring to accreditation such as that which exists, for example, at the entrances to the Courts.

Mr. Santiago Menéndez takes the floor and states that he has taken note of the request and that the matter will be studied.

The President of the Forum then addresses those present in case anyone wishes to make any further comments. There were no further statements, and he thanked everyone for their attendance and participation, and closed the twelfth plenary session of the Forum of Associations and Colleges of Tax Professionals.