Minutes of the meeting

MINUTES OF THE MEETING OF THE PLENARY SESSION OF THE FORUM OF ASSOCIATIONS AND
COLLEGES OF TAX PROFESSIONALS
HELD ON NOVEMBER 26, 2019

President of the Forum of Associations and Colleges of Tax Professionals

Director General of the State Agency for Tax Administration

Mr. Jesus Gascon Catalan

Members representing the Tax Agency

Director of the Revenue Department

Mr. Guillermo Barros Gallego

Director of the Customs and Industrial Property Department. Excise Duties

Ms. Pilar Jurado Borrego

Director of the Tax Information Technology Department

Mr. Manuel Alfonso Castro Martínez

Director of the Planning and Institutional Relations Service

Mrs. Rosa Maria Prieto del Rey

Director of Legal Services

Mr. Diego Loma-Osorio Lerena

Special Delegate of Catalonia

Mr. Isidoro Garcia Millan

Deputy Director General of Tax Technology of the Tax Management Department

Mrs. Mercedes Jordán Valdizán

Deputy Director General of Legal Order of the Department of Financial and Tax Inspection

Mr. Marcos Alvarez Suso

Members representing Associations and Colleges

Spanish Association of Tax Advisors

Director of the Study Office

Mr. Arturo Jimenez Contento

Member in charge of Studies and Research

Mr. Javier Gomez Taboada

Professional Association of Accounting and Tax Experts of Spain

Secretary of the Board of Directors

Mr. José Antonio Fernández García-Moreno

Member of the Board of Directors

Mr. Antonio Ibarra Lopez

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

Head of the Tax Department of the General Council

Ms. Pilar Otero Moar

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

Second Vice President

Mr. Adolfo Jimenez Ramirez

Office of Administrative Managers and Tax Advisors

Lawyer

Mrs. Raquel Cobos Casero

Registry of Tax Advisors Economists

Director of the Research Service

Mr. Ruben Gimeno Frechel

Technical secretary

Mr. Luis del Amo Carbajo

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

Deputy Director General of External Communications of the Planning and Institutional Relations Service

Mrs. Dolores Carreno Beltran

In Madrid, on November 26, 2019, the sixteenth plenary meeting of the Forum of Associations and Colleges of Tax Professionals is held, attended by the people mentioned, 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 2, 2019.

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

4. Procedure for adhering to the Code of Good Practices of Associations and Colleges of Tax Professionals and the Code of Good Practices of Tax Professionals.

5. Other considerations, requests and questions. 

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

The session is opened by Mr. Jesús Gascón Catalán, General Director of the State Tax Administration Agency and President of the Forum of Associations and Colleges of Tax Professionals, who, after thanking everyone present for their attendance, reports on the points that are going to be discussed at the meeting and adds that in the section dedicated to "Other considerations, requests and questions" he is going to make a presentation on the status of the "Strategic Plan of the Tax Agency 2020-2023" which, although it does not yet have a date for publication, is practically finalized.

2. Approval of the minutes of the meeting held on July 2, 2019

The President of the Forum gives the floor to Ms. Dolores Carreño Beltrán, Deputy Director General of External Communication of the Planning and Institutional Relations Service and Technical Secretary of this Forum, who states that the minutes of the fifteenth plenary session were sent to the Associations and Colleges prior to this meeting, having received observations from the General Council of Social Graduates. These were incorporated into the minutes and the objected part was communicated to the Associations and Colleges. He added that no comments have been received so far. Addressing the audience, he asks if anyone wants to make any comments. Since none was formulated, the minutes of the 15th plenary session held on 2 July are hereby declared approved.

Finally, Ms. Dolores Carreño informs that the minutes approved at this Plenary Session will be published on the Tax Agency's website, in the space reserved for this Forum.

The Director General of the Tax Agency then moves on to the third point on the agenda and gives the floor to Ms. Rosa María Prieto del Rey, Director of the Planning and Institutional Relations Service.

3. Information on the topics discussed in the working groups

Ms. Rosa María Prieto took the floor and pointed out that, at the meeting of the working group on new regulations, models and campaigns, which took place on October 23, the issue of the procedure for joining the Code of Good Practices of Associations and Colleges of Tax Professionals, as well as the Code of Good Practices of Tax Professionals, was discussed, among other issues. Regarding the first of these, the Tax Agency stated that, given that the organisation, operation and legal form of each Association and College are different, the entities needed to communicate which body in their organisation would be competent to make the decision to join. It was also pointed out that the Tax Agency also needed to know the number of associates or members of each entity in order to establish ranges, based on size, that would delimit the number of queries that each one could raise. The Director of the Planning and Institutional Relations Service adds that the information was requested from the Technical Secretariat of this Forum and that, at this time, some Associations and Colleges have already responded, but not all. On the other hand, regarding the procedure for adhering to the Code of Good Practices for Tax Professionals, there was a unanimous position at the meeting that a mandatory requirement had to be the membership of the professional to the corresponding Association or College.

Ms Rosa María Prieto gives the floor to Ms Mercedes Jordán Valdizán, Deputy Director General of Tax Technique of the Tax Management Department, who begins her presentation by pointing out that she is going to comment on the activity of the working group on new regulations, models and campaigns that affect her Department. Thus, it indicates that the most outstanding issues were the following:

1. Regulatory and technical changes for the next news campaign: It was reported that most of the changes were essentially technical and aimed primarily at improving taxpayer assistance services, especially during the income tax campaign. Thus, in relation to the different models, without going into detail, it was highlighted that with regard to model 198, the annual declaration of operations with financial assets and other securities, numerous observations had been received on the draft order, some of which had been incorporated into it, such as the case of the deferral of its entry into force until January 1, 2021. Regarding model 184, entities under the income attribution regime, it was reported that a greater breakdown of the information would be included, both for economic activities in direct estimation, as well as for real estate capital returns.

   On the other hand, as regards technical modifications, it was pointed out that the objective was to improve the quality of the information provided and the following were highlighted:

   • Extension of the TGVI system on line: It was reported that the system had not had any major incidents in its first year of implementation, with most having been resolved during the testing period. Thus, it was announced that by 2019 its use would be extended to the rest of the information declarations. Ms. Mercedes Jordán adds that a test portal has been available since the first week of November, so that the appropriate validations can be carried out and it can be verified that the forms can be completed during the submission period.

   • Elimination of SMS pre-declarations of forms 190, 347 and 390: It was indicated that its removal should not cause any problem, since it had very residual use. In fact, no comments were received on the matter during the public consultation process.

2. Corporation tax: It was reported that the Tax Agency was undertaking a series of tasks aimed at implementing a taxpayer assistance service in the 2019 campaign, consisting of the provision of certain tax data held by the Administration, in a manner similar to that done in the annual IRPF campaign.

3. Regulatory changes affecting form 349, summary declaration of intra-community operations. The following was reported in the working group:

   • The modifications are due to the transposition of community regulations to the VAT Law and Regulations , which causes the model to cease to have such a formal value, to acquire a more substantial role, in terms of control.

   • The annual filing is eliminated (last filing in January 2020 for the 2019 financial year).

   • The tax rules for “consignment sales agreements” are incorporated into the model.

   • Chain operations are simplified (successive deliveries between different companies when there is a single intra-Community transport).

   • The requirements for EIB to be exempt are highlighted (NIF- VAT, update of VIES , declarations of intra-community operations).

Ms. Mercedes Jordán then comments that at the meeting of the working group to analyze measures to promote legal certainty, which also took place on October 23, the status of the transposition of the Directive (EU) was reported. ) 2018/822 of the Council, of 25 May 2018 (Directive on Fiscal Intermediaries or DAC 6). He points out that, with regard to the draft order approving the models, the deadline for comments ended on 11 November and that many of those received exceeded the scope of the order itself, since they referred to the Directive itself. However, he adds that some of the contributions received will be included in the order, since they affect issues within the management of the order itself, such as the deadline for submitting the models.

Finally, the Deputy Director General of Tax Techniques points out that, as everyone will remember, the Tax Agency published on its website an electronic format of VAT record books with the aim of guaranteeing standardized action adjusted to the procedures established by tax management. Thus, he adds that, as a further measure of assistance and help to the taxpayer, this format has been extended to the IRPF record books and that an electronic format was published on November 15 standardized, voluntary, which allows joint compliance with the obligations in both VAT and Personal Income Tax .

Mr. Jesús Gascón thanks Ms. Mercedes Jordán for her intervention and gives the floor to Mr. Marcos Álvarez Suso, Deputy Director General of Legal Regulations of the Department of Financial and Tax Inspection, to comment on the meeting of the working group for the analysis of measures to promote legal certainty, which took place on October 23.

Mr. Marcos Álvarez begins his presentation by pointing out that, of the issues discussed at the meeting of the working group, he will briefly refer to the following:

1. Note on the position of the AEAT in bankruptcy proceedings: The Director of the Tax Collection Department commented that the note on the position of the Tax Agency in bankruptcy proceedings had been sent to the Associations and Colleges that make up this Forum, so that they could make any observations they deemed appropriate. The Tax Collection Department has received several suggestions, which are appreciated and are being analyzed by the Tax Agency. He added that the note will be published on the website for general knowledge as soon as possible, in order to fulfil the commitment to make known the criteria used by the Administration in its actions.

2. Application of the special regime of the VAT equivalence surcharge : It was recalled that, although this is a mandatory regime once the subjective and objective assumptions are presented, both for the retailer and the wholesaler, the Department of Financial and Tax Inspection was detecting cases in which the surcharge was not being passed on. Thus, in order to avoid these situations, and given that some wholesalers had claimed that they were unaware of the retail nature of their clients, it was reported that the Tax Agency was working on the implementation of a public consultation for distributors, where, by entering the NIF of the client, the wholesaler could know if they were dealing with a retailer and, thus, be able to apply the corresponding surcharge.

3. Status of processing of the transposition of Council Directive (EU) 2018/822, of May 25, 2018 (Directive on Fiscal Intermediaries or DAC 6), as well as the draft order approving the relative declaration models to the information obligation established therein: The General Directorate of Taxes recalled the general lines of the obligation and communicated that there was not yet a definitive text, since it was pending the opinion of the Council of State for approval by the Council of Ministers. For its part, the Tax Management Department outlined, in general terms, the new models (234, 235 and 236) that were going to be implemented for the declaration of information relating to cross-border tax planning mechanisms by intermediaries or, where appropriate, taxpayers.

4. Questions raised by Associations and Colleges:

   • Dissolution of community property: It was pointed out that it would be appropriate for the Tax Agency to review its interpretation of this issue and clarify certain legal criteria, differentiating the dissolution of communities from exchanges, to which the Planning and Institutional Relations Service replied that the proposal would be studied.

   • Checks on real estate capital gains in the Personal Income Tax : It was noted that the Administration was carrying out checks regarding the value to be considered as the basis for calculating the depreciation of properties, especially in the case of properties acquired by inheritance, as well as the application of the 60% reduction, using in this case, in the opinion of the Association, an incorrect criterion. The representative of the Tax Administration Department replied that she had taken note of the matter in order to take it into account for future audits.

   • Valuation of transfers of shares/equities not listed in the IRPF : It was commented that since these actions were carried out by the Tax Management Department and not by the Inspection Department, the taxpayer received a settlement proposal directly, causing him to feel somewhat defenseless, especially since the High Courts of Justice have already reiterated in their pronouncements the exceptional situation of the country in recent years, in which there have not been favorable market conditions. The Deputy Director General of Legal Assistance indicated that these checks used the data contained in the corporate tax returns, since it is presumed that these reflect the entity's actual assets.

   • Progress in the collaboration procedure between the Tax Agency and the General Directorate of Taxes for the resolution of queries: It was reported that both the Tax Agency and the General Directorate of Taxes are of great interest in offering legal certainty to those who request it and as close as possible in time to the occurrence of the taxable event. It was reported that the two bodies were working on establishing a system to speed up, to a certain extent, the response to certain types of queries, but that, for the moment, many aspects remained to be considered.

     In relation to this issue, Mr. Marcos Álvarez adds that any new developments that may arise will be brought to the attention of the members of this Forum.

   • Thomas Cook bankruptcy proceedings: The possibility of rectifying tax bases for VAT was raised as a consequence of the bankruptcy of said company, to which the Tax Agency responded that neither Spanish nor Community legislation allowed flexibility. ad hoc for specific taxpayers.

To conclude his speech, the Deputy Director General of Legal Regulations commented that the concern of the Tax Agency regarding certain news items appearing in the media, with biased information regarding the actions of the Administration, was also discussed at the working group meeting. He added that he considers the cooperation and transparency function of this Forum to be of great importance and invites those present to use it as a forum to express any disagreement or discontent. On the other hand, he points out that he thanks the Associations and Colleges for all the issues they have contributed to the work of the Forum groups and urges them to continue doing so.

Mr. Jesús Gascón thanks Mr. Marcos Álvarez for his presentation and offers the floor to those present in case anyone wishes to make any observations or comments. Since no interventions were made, the next point on the agenda was moved on.

4. Procedure for adhering to the Code of Good Practices of Associations and Colleges of Tax Professionals and the Code of Good Practices of Tax Professionals.

The Director General comments that, following the approval of the two Codes at the plenary session last July, the Associations and Colleges have necessarily had to open a period of reflection regarding the adoption of a position in relation to them. He points out that the Tax Agency's intention is to start the accession procedures as soon as possible. Mr Jesús Gascón added that, in order to know the state of the situation in each of the groups, he wishes to open a round of interventions.

First of all, Mr. Joan Torres Torres, representative of the Spanish Federation of Professional Associations of Tax Technicians and Tax Advisors (FETTAF), takes the floor. He explains that within his federation each entity has its own particularities and that, regardless of the fact that the federation is the link with this Forum, what has been proposed is that each association can join individually. He adds that he is aware that the majority have already discussed it in their boards of directors and that they are in favour of joining, that is, they only need to complete the formality, and that there are two or three that have not yet had time to discuss it.

Next, Mr. Adolfo Jiménez Ramírez, also a representative of FETTAF, intervened. He added that, although the addendum has been approved, he does not agree with it, since, in his opinion, the Code should be one, to which each group adheres or not, according to its criteria. However, he notes that he understands that, in some way, the entities reluctant to approve the Code had to have some mechanism that would allow their members to join and not deprive them of this right.

Next, Mr. José Castaño Semitiel, representative of the General Council of Official Colleges of Social Graduates of Spain, took the floor. He stated that, firstly, he would like to clarify the question of whether tax professionals who are not registered or associated would be able to join the Code on their own. He adds that his group has previously expressed its opposition to this point.

Mr. Jesús Gascón responds that one of the requirements to be able to adhere to the Code is that people who wish to do so must be associated or registered in an entity that has a code of ethics. He adds that, in the short and medium term, the Tax Agency is only considering a procedure open to the associations and colleges present here and their associates and members.

Mr. José Castaño Semitiel then comments that his group's approach is that the approval of the adhesion be carried out by the full National Council, made up of all the presidents of Spain. He added that each provincial college will subsequently manage its accession through an addendum to the national approval. It also indicates that it would be desirable for the operation to be similar to the social collaboration procedure, so that each College could electronically handle the membership of its own members who so wish. That is, if a member wishes to join, he should do so through his college, so that, if he ceases to belong to the college, the entity can, in some way, communicate this fact and his membership can be cancelled. If this person subsequently joins another association, they must process the membership again through the same association. Finally, Mr. José Castaño points out that the national plenary session is scheduled for the end of December, where he believes that the adhesion to the Code will be approved without incident, since it has been a topic that has been debated internally in depth.

Next, Ms. Raquel Cobos Casero, representative of the Cabinet of Administrative Managers and Tax Advisors (GESAF), intervened, pointing out that her group is in a situation similar to that outlined by the representatives of the General Council of Official Colleges of Social Graduates of Spain. He added that the Council is expected to approve the membership at the end of the year and that any member wishing to join will have to process it through their organisation.

Next, Ms. Pilar Otero Moar, representative of the General Council of Colleges of Administrative Managers of Spain, takes the floor. She begins her presentation by pointing out that the General Council has already approved the adhesion to the Code and that, at this moment, the issue is being debated in its twenty-two territorial colleges in order to raise the approval of the adhesion in their respective governing boards. He added that, in his opinion, approval will be unanimous. On the other hand, it points out that, as regards procedure, it would be desirable for the Council to be able to deal with processing applications for membership from territorial colleges. Finally, he asked whether it was currently possible to apply for membership of the Code.

Ms. Rosa María Prieto replies that, given that each entity has a different way of operating, the technical finalisation of the procedure is being carried out and that in December it will be communicated to those present, in addition to publishing a note on the website. He added that centralising applications for membership in the Council, for their subsequent transfer to the Tax Agency, should not present any problems.

Next, Mr. Luis del Amo Carbajo, representative of the Registry of Tax Advisors and Economists (REAF), intervened. He said that his entity planned to hold a plenary session in mid-December and that what they were considering was that, once the Code was approved, a similar scheme to that of the social collaboration procedure would be followed, that is, that each college would be responsible for processing its own membership and that of its members, although with some type of centralization in the General Council for informational issues with the member tax professionals, whether they belonged to their entity or another.

Mr. Manuel López Frías, Secretary of the General Council of Customs Agents and Brokers Associations, then took the floor. He pointed out that the Customs Agents Association has already approved the adhesion to the Code of Good Practices and that, at this moment, they are transmitting their position to the associations that they represent. He adds that their approach to the procedure is that membership applications, whether from a college or its members, are centralised in the General Council and, from there, communicated to the Tax Agency, that is, that this body is the communication channel, in order to have the membership status of all members of its group under control at all times. He added that each college would be responsible for approving its members' applications and forwarding them to the Council.

Mr. Antonio Ibarra López, representative of the Professional Association of Accounting and Tax Experts of Spain (AECE), then intervened to point out that his entity has a national character and, as there is no territoriality, it will be the Association itself that channels the adhesion of its members. On the other hand, he indicates that he wishes to reiterate the question raised by the representative of the General Council of Official Colleges of Social Graduates of Spain on whether non-collegiate or non-associated professionals could adhere to the Code. The Court therefore requests that it be recorded in the minutes of this plenary session that the correct interpretation of the Code, as currently drafted, means that a professional who wishes to adhere to the Code of Good Practice must necessarily have the supervision of the Association or College to which he or she belongs. He adds that virtually all the entities present have the same opinion.

Mr. Jesús Gascón replied that the Tax Agency has interpreted that there is unanimity regarding this issue on the part of all entities. He added that the Administration's position is that, as regards the Code for Associations and Colleges, it is a Code open to the adhesion of any group, since there may be associations, present or future, that wish to do so. However, it indicates that, if any association wishes to join and forms part of any of those present here, the Tax Agency will redirect it to process it through its entity, if this were the operating criterion adopted by it. He cites, as an example, the Code of Good Tax Practices approved unanimously by the Large Business Forum, which is made up of 27 entities. However, it indicates that any other company that so decides can adhere to the Code of Good Tax Practices, as in fact occurs. More than 140 entities have now signed up, which, given that many of them are groups, means that there are currently more than 1,300 members. On the other hand, the General Director points out that, with regard to the Code of Good Practices for Tax Professionals, the point that makes individual adherence impossible is that it would lack certification of its adherence to a code of ethics. That is to say, professionals who wish to adhere to the Code must necessarily belong to an association or college that has a code of ethics to which their activity is subject.

Next, Mr. Javier Gómez Taboada, representative of the Spanish Association of Tax Advisors (AEDAF), states that his association has decided not to institutionally adhere to the Code for Associations and Colleges, without prejudice to full respect for all its members who, individually, wish to adhere to the Code of Good Practices for Tax Professionals.

Next, Mr. Rafael Gil March, representative of the General Council of the Spanish Bar Association, took the floor and pointed out that, although his entity voted against the approval of the texts of the two Codes, this does not prevent members who wish to join from doing so. He added that he agrees with what has already been said at this meeting and at previous ones regarding not allowing the membership of people who are not members or collegiates. On the other hand, he comments that at this time he is not aware of whether the Council intends to modify the position initially adopted, without prejudice to the fact that some college may decide to approve the adhesion, since the opinion of the Council in this matter is not binding on the groups it represents. That is to say, the different colleges, or the members, individually, can decide to request adherence to the respective Code.

After the interventions of the representatives of the Associations and Colleges, Mr. Jesús Gascón stated that it was clear where each one stands. He reiterates that the Tax Agency has no objection to the request for membership being at a central or territorial level, according to the criteria approved by the governing bodies of the entity, and that, at the time when the association or college becomes a member, the possibility would be opened for its members to join. He added that, in the case of entities that do not wish to join, the addendum would have to be put into operation so that their associates or members could do so on an individual basis.

Mr José Castaño Semitiel takes the floor and asks whether, in relation to the Codes, there is a planned date for the start of the adhesion procedure and whether it can be done electronically.

Ms. Rosa María Prieto answers that the calendar considered by the Tax Agency is that in December the Associations and Colleges that wish to do so can join and that at the end of January 2020 tax professionals can do so on an individual basis. As for the procedure for adhering to the Codes, it will be processed through the Electronic Office. He added that, however, once it is finished, those present will be informed so that they can make any observations they consider may contribute to improving it. Technically, it will be like the rest of the procedures included in the Electronic Office, although it remains to be determined how the withdrawals will be structured.

Mr. José Castaño then asks whether the data on the number of associates or members should be sent to the Tax Agency with some breakdown, at the Council level or at the College level.

Ms. Rosa María Prieto responds that the purpose of knowing the number of members is to size each association to determine whether it can be more or less representative for the purposes of establishing the number of monthly consultations that each group can make.

Next, Mr. Luis del Amo Carbajo states that, given that the associates and members of entities that are not going to adhere to the Code will be able to do so on an individual basis, in some way this will mean in practice the participation of these entities in the specification and development of the commitments included in the Codes, such as the number of training hours, the quality standards considered acceptable, etc., as well as serving as a communication channel between the Tax Agency and the members of their groups. Thus, Mr. Luis del Amo considers it somewhat inconsistent that there are associations and colleges that do not adhere to the Code, but are nevertheless directly involved in practical issues of its development.

Mr. Jesús Gascón answers that the Tax Agency assumes that all entities represented in this Forum have a code of ethics, as well as manuals of conduct for their members. He adds that the purpose of the addendum is to ensure that a professional's membership application has the support of the corresponding association or college, which will also serve as a communication channel with the Administration for their queries. However, Mr Jesús Gascón points out that the issue raised will be analysed.

Mr. Javier Gómez Taboada, representative of AEDAF, took the floor and stated that he agreed with the observations made by Mr. Jesús Gascón and that he did not see any incompatibility between the lack of institutional support of an association and its function of serving as a communication channel for its affiliated members. He also said that there was an information meeting on the Codes at the Special Delegation of Navarre and that he would like to know if this is a particular initiative of this delegation or if information sessions will be promoted throughout Spain. Furthermore, she requests that the minutes of this meeting record her Association's disagreement with the format used by the Tax Agency in its response to AEDAF's request for the Legal Service report, regarding the extension of the exemption from maternity benefits for firm situations. He added that the reply lacked a letterhead, date and signature.

Mr. Jesús Gascón responds that, in relation to this last question, he has to point out that when, internally, he requests a report that is going to be assumed by the General Directorate of the Tax Agency, he does not require any type of formality, normally using email. However, when it has to be provided to an external body, such as a court, the formal requirements are met. He added that the fact that the report in question was in that format was for simple operational reasons, but that, nevertheless, in the future, in cases where there may be external significance, other ways of completing the requests will be studied. On the other hand, as regards information sessions on the Code of Good Practices, he indicates that there is no provision for this, but that specific requests that arise will be addressed.

Thereafter, as there were no further interventions, the President of the Forum moved on to the next item on the agenda.

5. Other considerations, requests and questions

Mr. Jesús Gascón comments that, as he indicated at the beginning of this meeting, he wishes to present the state of development of the Strategic Plan of the Tax Agency 2020 - 2023. He points out that it has not yet been presented and that some figures are still being updated, since it was initially intended for the period 2019 - 2022. He goes on to point out that the Plan is a multi-year strategic planning document, drawn up by the Tax Agency to highlight its fundamental lines of action and priorities, as well as to establish a series of indicators that better reflect the work it carries out, while strengthening the institution's own governance, transparency and accountability. Since it is a document prepared by the Tax Agency for the organization itself, it has clear limitations, that is, it will not propose regulatory changes, beyond the self-government rules, nor does it affect the territorial financing system. He added that this is not an exhaustive and detailed account of the work of the Tax Agency, as the document has more than 130 pages, in which it is intended to highlight only the essential and priority aspects. Mr. Jesús Gascón goes on to point out that, first of all, an analysis of the context is included and that, although the environment may be very changeable, it must be highlighted that, in Spain, regardless of whether budgetary emergencies may arise, the current situation is different from that of recent years, where the impact of the economic crisis prioritised short-term actions. This new scenario has thus enabled the Tax Agency to adopt a strategic plan for its activity in the medium and long term. On the other hand, it indicates that the international environment in the tax field is in a period of reflection both in indirect taxation and, very especially, in direct taxation and that it remains to be seen what this leads to. He also points out that the international environment may also be conditioned by the possible impact of Brexit, an aspect that will depend on the exit mechanism finally adopted, but which will necessarily have procedural and operational consequences. On the other hand, he comments that the Strategic Plan has paid special attention to tax sociology, given that the studies of the Centre for Sociological Research (CIS) and the Institute of Fiscal Studies have revealed very interesting issues in relation to the opinion of the Spanish people on the tax administration, fraud, the Tax Agency's support services, etc. Mr Jesús Gascón points out that it is very significant that more than 70% of those surveyed responded that tax fraud is not part of their view of life. For this vast majority of citizens, it is necessary for the Tax Agency to strengthen the information and assistance mechanisms that facilitate compliance with their tax obligations. However, on the other hand, 8% of respondents say that tax fraud is inherent to the very existence of taxes, and that the Administration's response will have to be based on the establishment of control mechanisms. Finally, there is a percentage, around 25%, who believe that fraud is an option at certain times in personal or corporate life. Preventive measures should be strengthened against this group.

Mr Jesús Gascón goes on to point out that the Plan has also taken into account existing studies on the underground economy. Specifically, in the studies carried out by the European Commission on the tax gap and other related indicators show that, in the case of Spain, compared to its neighbouring countries, the number of underground economies is not very high. However, he points out that many times the year-on-year variations are due more to methodological changes than to changes in taxpayer behaviour. Studies on the shadow economy sometimes present very alarming data, but when international organizations commission these studies, these percentages fall drastically. Sometimes there are certain controversies in this regard that convey the idea that much more could be raised. However, he adds that not all of the black economy can be regulated, since, for example, illegal activities are not likely to generate additional tax revenue. In addition, there are very low-intensity economies with very low amounts that would not be taxed taking into account personal and family minimums, for example, in the IRPF . He also says that, although it may seem contradictory, there is an underground economy that is carried out by paying taxes. He cites as an example the case of a place where a hidden activity takes place. That establishment is paying IBI and, in addition, some energy supplies and, probably, it is being supplied in establishments where it supports VAT . However, Mr. Jesús Gascón indicates that the existence of the underground economy is a reality and discovering it is also an objective of the Administration.

The Director General also comments that the results of the Tax Agency's control activities, which are presented annually, offer very high figures, around 15 billion euros. However, he points out that this figure includes results of all kinds and not necessarily those resulting from anti-fraud actions. He added that greater transparency is desirable in order to clearly report on the concepts included in these results. For example, income derived from regularised declarations with a result to be paid, corrections to self-assessments submitted by taxpayers that are rejected or reduced, etc. Furthermore, the Tax Agency carries out actions that are not reflected in the control results, such as the reduction of negative tax bases, the fight against smuggling or the effects induced, for example, by the warnings entered in the IRPF declaration that cause the taxpayer to directly declare correctly. On the other hand, he points out that there may be extraordinary results, atypical cases, which can make the result very high one year and very low the following year. Mr Jesús Gascón indicates that the Plan introduces seven strategic indicators that better illustrate the work carried out by the Tax Agency from a multi-annual perspective. Thus, in line with the objective of promoting tax compliance, the first indicator proposed focuses on measuring its evolution. To do this, a dynamic analysis is carried out comparing exercises in order to observe the evolution of the major macroeconomic magnitudes most directly related to tax revenues. The evolution GDP and national demand is compared in order to determine whether fiscal indicators are evolving better or worse than the main macroeconomic magnitudes. Mr Jesús Gascón points out that the conclusion is that voluntary compliance has improved in recent years, to which, to some extent, all those present have contributed with their activity. Thus, it indicates as a reference data that in 2019 the nominal GDP will grow by around 3.6%, while the aggregate tax bases will be around 5%. On the other hand, the tax behaviour of the inspected taxpayers is also being measured. With the exception of companies and groups affiliated with the Central Delegation for Large Taxpayers (where there is a great variability in results between years due to internationalisation and business restructuring which makes it difficult to make comparisons between years homogeneous), the Director General cites, as an example, that it had been observed that taxpayers inspected in 2015 had increased their declared income by 25.6% in the three years following the year in which the regularisation was carried out compared to what they had been declaring in the three previous years, with the average growth in tax income between these periods for all taxpayers being clearly lower: of 12.6%. Thus, this indicates that the inspections had a positive impact, resulting in an improvement in voluntary compliance. The Director General adds that it is necessary to extend the studies on the effects induced to other areas, such as customs, excise duties, the actions of the Tax Management Department, etc. He points out as an example the advertisements in the IRPF campaign on tourist rentals or on accounts abroad. The Tax Agency must therefore analyse how income evolves in the following years. That is to say, indicators must be established that allow illustrating the results derived from preventive actions in the different areas of action, since an improvement in voluntary compliance necessarily translates into a decrease in the results of control activities. Thus, indicators must serve to explain to society the work being carried out and to set priorities for action, since decreasing control results do not mean that work is being done worse, but are a consequence of the effort made in prevention. On the other hand, Mr. Jesús Gascón points out that when referring to control results, these are only computed if the effective income occurs, that is, the suspended debt is not included. Thus, another indicator that has been included in the Strategic Plan, in addition to the three mentioned above (voluntary compliance, induced effects and control results), is the improvement in efficiency, which is closely related to tax conflicts. Mr. Jesús Gascón points out that the Administration must act with transparency and be able to measure the litigation generated by its actions, in order to adopt measures to improve the situation. He clarifies that this matter has been analyzed both from the point of view of absolute conflict (number of appeals and economic-administrative claims), as well as in terms of relative conflict (percentage represented by what is appealed or claimed with respect to the totality of administrative acts issued by the Tax Agency). Thus, it indicates that, although the relative conflict is low, it means that the Economic-Administrative Courts receive between 150,000 and 160,000 claims per year, which places them in a very complex operational situation, which highlights the need for reinforcement in material and personnel resources, as has been done this last year, so that resolutions are issued within a reasonable time. On the other hand, he adds that the rates of annulment of administrative acts in the courts must also be analysed, both in economic-administrative proceedings and in contentious-administrative proceedings, in order to improve the quality of the actions both in their content and in their form. Thus, it highlights that the total or partial cancellations of the contested acts is around 30%. However, he points out that the Tax Agency issues millions of administrative acts and that, given the diversity of functions it performs, the studies of the percentages of annulments on the acts issued present variations depending on their nature, since there are procedures with a very low rate of conflict, such as in the census or tax collection area, compared to others that have a higher rate. Specifically, the cases of non-compliance reports and sanctions in inspection procedures have been analysed, bearing in mind that more than 80% of the reports are in compliance or with agreement, which shows a very clear strategic line and that is that, within the current regulatory framework, if it is possible to reach agreements, this route is used as an instrument to reduce conflict. However, he points out that the Tax Agency does not have this legal tool in procedures other than those of the inspector. He said that the Taxpayer Protection Council (CDC) has been commissioned to carry out a study on possible avenues for conciliation, which could require regulatory changes.

The Director General goes on to add that, on the other hand, analysing the conflict from the point of view of amounts, the main indicator is the debt suspended by appeal or claim. Thus, it mentions the existence of 41.627 billion euros of total outstanding debt, of which 12.763 correspond to debt suspended by appeal or claim and 5.664 to bankruptcy proceedings, with the Tax Agency's margin of action in terms of manageable debt being considerably lower than the 41.627 billion euros mentioned. Thus, it has been considered important to include an illustrative indicator focused on what could be called manageable debt, that is, that part of the total debt over which the Tax Agency has full capacity, since there is another part over which it has no room for manoeuvre, except to collaborate with the courts so that they resolve as soon as possible.

Mr. Jesús Gascón continued his presentation by pointing out that another quality indicator that has been considered important to include in the Plan is the payment of late payment interest by the Administration to taxpayers. Thus, it indicates that the payment of interest is imposed by the regulations, but that, nevertheless, it is an area of action that can be improved by the Tax Agency, since, fundamentally, late payment interest originates from delays in the processing of refunds and from unfavorable resolutions or sentences from which a refund to the taxpayer is derived. There are also cases where the scope for action is smaller, as is the case with refunds resulting from corrections to self-assessments. He added that, like the other indicators, this one will measure the trend over the years and, barring extraordinary situations, the interest paid is expected to decrease.

The Director General goes on to point out that another efficiency indicator has also been introduced, used in international comparison, which is based on the comparison of the Tax Agency's budget with the income it manages. The transaction yields a ratio below 0.7, which means that for every 100 euros managed, the cost to the Treasury is 0.7 euros. It indicates that the intention is to keep this rate stable since the Tax Agency is located ahead of the average of the OECD , the European Union and neighboring countries, such as France. , Germany and Italy. He added that maintaining this ratio would allow the organisation to recover the 3,000 personnel it has lost in recent years. The report also states that the Tax Agency is facing a truly worrying retirement scenario, as the average age of its staff is 53 years old. This means that if we want to have a prepared and trained staff, it is necessary to start holding the appropriate selection processes.

The Director General then points out that the Plan also defines some of the priority lines of action. The VAT highlights the pilot test of the pre-declaration of model 303 and the communication of tax data to companies in the Corporate Tax campaign in a similar way to what is done in Personal Income Tax , news that has had a lot of media coverage. He adds that, notwithstanding the differences between corporate taxation and that of a natural person with a simple profile in the IRPF , the Tax Agency is analyzing how far it can go in making the information it holds available to taxpayers. Thus, in the Corporate Tax it has been decided to share the data available to the Administration regarding tax credits pending application, fractional payments, withholdings, accounts abroad, etc., that is, all the information that has been transparent in the IRPF for some years now. This change in strategy is also in response to the objective of improving voluntary compliance, since, for example, the number of cases in which the tax credits pending application declared in a previous year do not match what is declared in the year in question is very high, tens of thousands of taxpayers. The Tax Agency believes that by providing this information to taxpayers, they are helping them to complete their tax return correctly. In short, it would be a matter of establishing communication channels with the taxpayer that are not limited to sending notifications related to verification procedures, but also launching initiatives that help them in the voluntary fulfillment of their tax obligations. On the other hand, Mr. Jesús Gascón indicates that it is also necessary to advance in the development of virtual assistants. He comments as an example that last year the Tax Agency assisted two million taxpayers in person regarding census issues. Thus, the implementation of a virtual assistant that would provide the taxpayer with the certainty that he has completed his census declaration without errors, in such a way that the Administration could send him a notice informing him of the deadline he has to present a certain self-assessment if his situation has not changed, or that, if his situation has changed, he could rectify his census data through the same channel, would free up work for the physical offices of the Tax Agency. That is, it would involve implementing self-service information or digital administrations where attention to the taxpayer would be concentrated through telephone and telematic means.

Mr. Jesús Gascón then indicates that the inspection activities will not have the sole objective of regularizing a situation with the subsequent payment of the resulting amount, but rather they are intended to have a positive future effect, that is, to influence the economic sectors and the environment of the inspected taxpayers, as he commented when referring to the induced effects. He said that direct action will be taken against the underground economy, such as hidden activities and undeclared sales. He added that the fight against fraud requires the participation of the whole of society and that the role played by social partners is very important. Furthermore, the Tax Agency also believes that the main beneficiaries of effective actions against the black economy are compliant companies, which, moreover, are the majority. In this regard, Mr. Jesús Gascón refers to the growing requests for the development of codes of good practice from certain sectors, such as CEOE - CEPYME or self-employed workers' organizations and reiterates what has already been commented on in previous meetings about the existence of a Code of Good Tax Practice, but that, having been the result of the work of the Large Business Forum, SME organizations believe that they are not specifically applicable to the groups they group together. Thus, in this field the Administration has to advance in the design of strategies jointly with business organizations. Furthermore, he adds that, in Europe, for example, issues are being debated about the future of VAT , and that it would be desirable to develop a “country position”, the result of dialogue between all economic agents. and legal and based on common interests.

Mr. Jesús Gascón, continuing with his presentation on the Strategic Plan, refers to the improvements included in the governance of the Tax Agency itself. The Plan itself, its indicators and the annual plan of objectives will be published on the Transparency Portal and submitted to Parliament. In addition, at the end of each financial year, a report prepared by the Internal Audit Service will also be published, which will show the degree of compliance with the annual objectives and the evolution of the multi-annual indicators. These reports will also be published on the Transparency Portal and submitted to Parliament. He added that the organisation's ethical infrastructure will also be improved, adapting it to new international demands. He points out that the Spanish Administration has a code of conduct for public employees. However, it indicates that the specific characteristics of the Tax Agency, given its size and the close relationship of its activity with the management of public funds, make it advisable to declare an explicit commitment through an institutional declaration, as well as the development of a code of principles and conduct applicable to its peculiarities. He added that a reporting channel for inappropriate behaviour will also be set up and an ethics advisory committee will be created.

Finally, Mr. Jesús Gascón points out that the Strategic Plan will be an open document, since, as occurs in companies, the strategy can become outdated due to the occurrence of certain events, whether favorable or unfavorable, such as the effects of Brexit or changes in international taxation. Therefore, he indicates that observations and suggestions will be well received and will serve to permanently adapt the plan to reality. The Director General also added that the Plan positively values the cooperative relationship model and explicitly refers to the codes of good practice, as well as to the progress that the transparency reports submitted voluntarily by companies have represented for the cooperative model, which allow the Tax Agency to have early knowledge of the entity's tax policy and tax risk management, which, in turn, results in greater legal security for the entity.

The President of the Forum then addresses those present and opens the floor for discussion.

First of all, Mr. Luis del Amo took the floor and proposed that, although it has nothing to do with taxes, bottled water in plastic containers should be eliminated from the meetings of this Forum.

Mr. Jesús Gascón responds that, in his opinion, it is a great idea.

Next, Mr. Antonio Ibarra intervened, who clarified that he was speaking in a personal capacity, and pointed out that the topic of the Strategic Plan and its seven indicators seemed to him to be a good initiative, as well as prevention based on the promotion of voluntary compliance. On the other hand, he indicates that in his professional experience “less is more” and, to explain this, he comments that a labor inspection, compared to those of the Tax Agency, lasts less time, since they are more repetitive, which means that the resulting quotas are lower and the number of taxpayers inspected is greater. That is, companies have a work review every one or two years. However, you can also say that 50% of your clients have not had a tax audit in 20 years. Thus, the taxpayer generally believes that he will not be inspected. On the other hand, there is also a widespread belief that when a tax inspection takes place, it will last a year or a year and a half and the result will be that the taxpayer will practically be left bankrupt, in other words, it will be substantial. According to Mr Antonio Ibarra, a more frequent inspection, which takes less time and results in lower fees, would be more instructive and would have a better effect on the taxpayer's behaviour, while also resulting in less conflict. On the other hand, he points out as a criticism the fact that around 30% of the appeals or claims are resolved in favour of the taxpayer in the economic-administrative courts, and that, of the remainder, another 35% are resolved favourably in the contentious-administrative courts. Thus, he indicates that in order to reduce litigation, the resolutions of the appeals for reconsideration could be improved, where, in his particular case, he has found that out of 10 appeals for reconsideration that he presents, 9 are rejected by administrative means.

Mr. Jesús Gascón answers that, in relation to the first point, the possibilities of action that the Administration has are very broad and it has to diversify them. However, he points out that a preventive approach to taxpayers has many positive aspects. He also added that he agrees that it is necessary to encourage inspections to be carried out as close as possible to the occurrence of the taxable event. On the other hand, in relation to the second issue raised, he comments that, of the approximately 70% of resolutions issued by the economic-administrative courts in favour of the Administration, only between 15 and 20% reach the contentious-administrative route, which means that the 30% of cases in which the taxpayer is ruled in favour of this route represents a very small percentage, since the taxpayer does not directly resort to this route. However, Mr. Jesús Gascón adds that, although it depends on the procedure, statistically at this time the estimates in favor of the taxpayer in the appeals for reconsideration exceed those that take place in the economic-administrative and contentious-administrative channels considered together. Furthermore, it indicates that taxpayers often ignore the procedure in which they can make objections, presenting them later, in the appeal phase. This peculiar fact makes the Tax Agency consider that the taxpayer does not identify this procedure correctly, because the Administration is not communicating it to him adequately. Thus, an analysis is also being made of whether, for the sake of legal rigour, specific information is not being provided on the course of action that is open to the taxpayer with a particular notification.

Next, Mr. Javier Gómez intervened, saying that he found all the reflections that had been made very interesting and that he would be closely following the progress of the Strategic Plan. On the other hand, he comments that he also wants to contribute, as a reflection on what was said about the fact that the suspended debt does not count in the results, that the percentage of the debt pending collection that is reflected in the assets of the national accounting has always been missing from a statistical or macroeconomic point of view. Ask if 100% is collected or if it decreases as time goes by or certain incidents occur. He adds that it would be desirable for this information to be made transparent.

Mr. Jesús Gascón responds that the difficulty in this matter lies in the fact that, since the time periods are so long, the filtering takes place over a very long period of time. Thus, the contested debt is incorporated into the national accounting as the courts rule in favour of the Administration and the corresponding income is generated. In some cases, the processes last more than a decade. However, he adds that it is being observed that to the extent that the actions are closer to the occurrence of the taxable event and the adjustments refer to a smaller number of years, the collection occurs more immediately. On the other hand, it indicates that there are items for which there are very few expectations of collection, such as the approximately 6 billion euros of debt affected by bankruptcy proceedings. He said that in this matter, an attempt will be made to be more transparent, since it is a critical issue and the fact that the part of the debt affected by bankruptcy proceedings has been identified is in that direction.

Next, Mr. José Castaño takes the floor and indicates that, in relation to what was said about the cases in which, on occasions, taxpayers do not understand the notifications, he reiterates the request already made in previous meetings for a simplification of the language used in official communications, so that they are clearer for everyone. On the other hand, he points out that, as regards the publication of strategic indicators, it would be interesting to have them broken down by Delegations so that, within the framework of the cooperative relationship, they could be shared in this Forum, and also, at the Delegation level, meetings could be convened with the representatives of the forum to transmit the data of that delegation and solutions could be provided for specific situations that need correction.

Mr. Jesús Gascón answers that the publication on the Transparency Portal, as well as the submission to Parliament, will be of national, aggregated information. However, he points out that when the data can be territorialised, there would be no problem in sharing them in this Forum.

Mr. Antonio Ibarra then spoke. In relation to the comments made about the approximately 6,000 million euros of outstanding debt derived from bankruptcy proceedings, he pointed out that the so-called “second chance law”, in his opinion, has been a failure and has not served to alleviate the effects that the hard years of the economic crisis had on the activity of many self-employed workers. He says that there is a very large group of people who, due to their debts, are developing their activity, at least in part, within the framework of an underground economy. He explains that they have to resort to relatives and trusted people to appear as owners of the activity so that they can collect their remuneration, in “black money”. Mr. Antonio Ibarra adds that it would be desirable for the interpretation of the recent Supreme Court ruling of July 2, 2019 to be carried out in such a way that the "second chance law" would be truly effective and would allow the activity of this group to be fully reincorporated into the Spanish economy. Finally, he points out that, although the Tax Agency does not have regulatory authority, it could consider proposing a more flexible position in this matter, favourable to the exoneration of debts, given that the emergence of activities would lead to greater income for the State.

The General Director responds that the outstanding debt arising from bankruptcy proceedings affects, in terms of amounts, mainly companies and, to a very limited extent, individuals, so for this group a more opportunistic approach should be considered. He added that the Tax Agency is still carrying out an analysis of this concept as part of the outstanding debt.

Next, Mr. Rafael Gil March takes the floor and indicates that projects such as the Strategic Plan have a theoretical or principle-based approach that is very well received, but that, subsequently, they are not reflected in their practical, day-to-day application. He adds that, for example, in the actions of the Tax Management Department, which has a larger volume of affected taxpayers than other Departments, such as the Inspection Department, there is no treatment towards the taxpayer that can be described as close. Thus, the real perception of the citizen is that when they receive a communication from the Tax Agency it is always to pay some amount. Furthermore, the small amount of the amount sometimes makes it surprising that the Administration allocates resources and time to regularizing certain situations, instead of acting more comprehensively on others that could have greater economic significance. Mr Rafael Gil March adds that it is possible that establishing the indicators that have been discussed will allow for better identification of priorities. On the other hand, he reiterates that it would be essential to improve the treatment of taxpayers by management bodies, which, in his opinion, would contribute to generalising an awareness of voluntary compliance and would improve the perception that citizens have, not only of the Administration, but also of tax professionals, making their work easier, especially when they want to convey that compliance has many more advantages than non-compliance or concealment of income.

Mr. Jesús Gascón answers that, indeed, in mass actions too the bias has to be marked more by prevention than by repression. He adds that he has already mentioned that, for example, in the case of Corporate Tax, the Tax Agency finds that the taxpayer in the declaration of a particular year is not consistent with what was declared in previous years. In many cases, the economic significance is minimal, but it is nevertheless very difficult for the Administration to ignore a flagrant contradiction. Thus, in these cases the solution may consist of establishing a system of preventive warnings that allow the taxpayer to check their own information and modify it where necessary. He adds that, in this way, the Tax Agency could devote more resources to other more important priorities such as the emergence of undeclared tax bases or the black economy. On the other hand, Mr. Jesús Gascón reiterates that the Strategic Plan is based on greater regulatory simplification combined with an effort in prevention, with the aim of bringing about changes oriented towards voluntary compliance in the tax behaviour of the taxpayer. However, he points out that a plan of this nature, with important strategic changes, cannot be implemented overnight, especially considering the size and complexity of an organisation such as the Tax Agency. He also said that one of the Plan's aims is to open a debate on the tax administration that society wants for Spain.

Since there are no new interventions, the Director General of the Tax Agency thanks everyone for their attendance and participation and closes the sixteenth session of the plenary session of the Forum of Associations and Colleges of Tax Professionals.