Minutes of the meeting

MINUTES OF THE PLENARY MEETING OF THE FORUM OF ASSOCIATIONS AND
COLLEGES OF TAX PROFESSIONALS
HELD ON JULY 5, 2016

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 State Tax Administration Agency:

Director of the Tax Management Department

Mr. Rufino de la Rosa Cordon

Director of the Department of Financial and Tax Inspection

Mr. Luis Mª Sánchez González

Director of the Tax Information Technology Department

Mr. Manuel Alfonso Castro Martínez

Director of the Planning and Institutional Relations Service

Mr. Ángel Rodríguez Rodríguez

Special Delegate of Catalonia

Mr. Gonzalo David García de Castro

Deputy Director General of Intervention and Management of Excise Taxes - Department of Customs and Excise Taxes

Mr. Vicente Cillero Martinez

Deputy Director General of Coordination and Management - Collection Department

Mr. Miguel Lorenz Falomir

Members representing Associations and Colleges

Spanish Association of Tax Advisors

Support for Study and Research

Mrs. Beatriz Ladero de las Cuevas

Professional Association of Accounting and Tax Experts of Spain

Chairperson

Mr. Juan Carlos Berrocal Rangel

General Council of the Spanish Bar Association

Vice-Dean of the Balearic Bar Association

Mr. Rafael Gil March

General Council of Colleges of Administrative Managers

President of the College of Galicia

Ms. Pilar Otero Moar

General Council of Official Colleges of Social Graduates of Spain

Member of the Fiscal Affairs Committee

Mr. Jose Castaño Semitiel

Spanish Federation of Professional Associations of Tax Technicians and Tax Advisors

President

Ms. Pilar Arxé Fonalleras

First Vice President Board of Directors

Mr. Juan Mendez Hernandez

General Registry of Tax Advisors / Registry of Tax Advisor Economists

Member of the Board of Directors

Ms. Esther Luque Sanchez

Technical Secretariat of the Forum of Associations and Professional Colleges

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

Mr. Rafael Serrano Galan

In Madrid, on July 5, 2016, the ninth 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 26 November 2015.

3. Provisional balance of the 2015 Income Tax campaign.

4. Other considerations, requests and questions.

I.- In development of the first point of the agenda , Mr. Santiago Menéndez Menéndez, General Director of the State Tax Administration Agency and President of the Forum of Associations and Colleges of Tax Professionals, opened the session, welcoming those attending the ninth plenary meeting of the Forum. He also stated that he would like to take this opportunity to convey the Tax Agency's commitment to this Forum in order to continue advancing the already established model of transparency and mutual trust. He goes on to point out that since the social collaboration model for the electronic submission of declarations began to operate under the agreements signed with professional tax associations and colleges, the number of declarations and procedures carried out through this method has not stopped increasing, with the consequent boost to electronic administration and a significant reduction in indirect tax burdens. Mr Santiago Menéndez emphasises that this would not have been possible without the active participation of tax professionals. Not only does the social partner facilitate compliance with tax obligations, but they also provide initiatives in the fight against tax fraud. He added that this work must be recognised by the tax authorities and by society as a whole. On the other hand, Mr. Santiago Menéndez points out that in the current circumstances, strengthening mutual collaboration is essential for the social collaboration system to be maintained and developed. He added that this Forum has a key role to play in this matter. Thus, the future development of the Forum must be based on two basic pillars of the application of our tax system: on the one hand, the simplification and facilitation of voluntary compliance with tax obligations, increasing the legal and operational security of taxpayers and tax professionals and, on the other, cooperation in the fight against tax fraud. The Director General of the AEAT concludes by sending a clear and resounding message of continuity and impetus to this Forum as a channel for dialogue and mutual recognition of the work carried out by both the tax authorities and social partners.

II.- In development of the second point of the agenda , the President of the Forum gives the floor to Mr. Rafael Serrano Galán, as head of the Technical Secretariat of the Forum, who explains the process of preparing the minutes of the previous meeting and addresses those present in case they wish to make any observations or comments on them. Since they are not formulated, it declares that the minutes of the meeting of 26 November 2015 are approved and will be published in the space reserved for the Forum on the Tax Agency's website.

III.- In development of the third point of the agenda , Mr. Santiago Menéndez gives the floor to Mr. Rufino de la Rosa Cordón, Director of the Tax Management Department. He begins by pointing out that the results he is going to present are provisional, pending detailed analysis of some elements. He continued his presentation by commenting that this Income Tax campaign, despite the fact that it included many modifications with respect to previous campaigns and once the incidents at the beginning were resolved, has developed normally. He goes on to point out the most significant new features of this campaign:

• First year of implementation of the tax reform (Law 26/2014).
• Simplification of the printing of declarations, reducing the number of pages and allowing the taxpayer to only present the payment/refund document to the collaborating entity.
• Improvement in RENØ service.
• New messages in the tax data.
• First campaign with Renta WEB.

Mr. Rufino de la Rosa points out that all the changes introduced in the Income Tax campaign were made with the intention that the taxpayer would not notice them and would only notice that it was easier, since they did not have to download the program or the tax data, these appearing incorporated into the declaration. The Director of the Tax Management Department adds that the Tax Agency's perception is that Renta WEB is simpler and more intuitive and that it is planned to incorporate the group that carries out economic activities next year, for which work is already underway in coordination with the Tax Information Technology Department. He goes on to point out that one of the objectives of Renta WEB was to extend the draft to the largest possible number of taxpayers and that, according to the figures to date, the number of drafts exceeds the number of declarations, although it is foreseeable that when the final number of submissions is available, they will probably remain at 50%, with drafts exceeding the 40% level of previous years.

Regarding the evolution of the presentation of declarations throughout the campaign, after overcoming some incidents, it has remained in line with the previous year's campaign, although with a slight increase, due in part to the greater speed that the processing of declarations through Renta WEB entails.

The Director of the Tax Management Department goes on to say that the main figures, although still provisional as they still need to be analysed in detail, are as follows:

• Income assistance services, which includes all access to the website for any service related to the campaign (obtaining tax data, requesting the RENØ, etc.): just over 22 and a half million taxpayers. This campaign incorporated a counter to measure how taxpayers accessed assistance services and it was found that the vast majority did so through the reference number. The Tax Agency is therefore certain that RENØ is a service that works very well and that is mainly why we are dealing with a practically telematic campaign. The electronic certificate and the Cl@ve system continue to grow but are still very far from the reference number as an access system.
• WEB Rent: Almost 15,300,000 taxpayers have accessed this service, which does not mean that all of them have finally filed their tax return via this means.
• Reference number (RENØ): 21,600,000 applications. However, although there has been an increase of around 30% compared to the previous year, the data are not homogeneous and comparable, since in the 2015 campaign the reference number is unique for each taxpayer and in the previous year there was the same number for spouses. A counter has also been added and it has been confirmed that taxpayers have mostly accessed this service through box 490 of the previous year, although it was also available with an electronic certificate and with the Cl@ve system.
• Number of declarations submitted: There are now almost 19,100,000, which represents an increase of 2.5% compared to the previous year. The forecast is that the figure will reach 19,700,000 once the claims submitted to financial institutions are taken into account. The number of tax returns to be filed has increased by 0.1% to 7.36 billion euros, which is an increase of 7.3%. The number of refunds requested has experienced a growth of 2.6%, with an increase in the amount as well, which was already foreseen and which is mainly due to the new deduction for large families and dependent persons with disabilities and the reform of the rates. The amount returned to date amounts to almost 7 billion euros, to almost 11.2 million taxpayers.
• In terms of the comparison between the submission of drafts and the declarations prepared through the PADRE program, it can be seen how by extending the scope of application of the former, they currently exceed the latter, although by a very small margin. What is noteworthy about these data is the increase of more than 15% in the submission of drafts compared to the previous campaign.
• Way of filing: The Tax Agency was the first Administration to introduce online filing of tax returns with a secure signature. This line of action has been confirmed in this campaign and online submissions have continued to increase compared to the previous campaign (8.3%) reaching 83%. Also, and because this campaign was the first in which Renta WEB was going to be used, the assistance service in offices was reinforced with an increase of more than 11% of declarations submitted through this service, compared to 2014. The Director of Tax Management points out that 95% of the declarations submitted online and those submitted at the offices of the Tax Agency are completed. It also points out that the differentiation between declarations submitted online or by other means has been overcome with the implementation of Renta WEB since, in one way or another, the data is in the Electronic Office of the Tax Agency and any modification is made from there, regardless of whether the taxpayer later presents it at the financial institution or by telephone, since the subsequent processing is done electronically.

Mr. Rufino de la Rosa concludes his presentation by highlighting that, in view of the data presented, the balance of the 2015 Income Tax campaign has been very positive and that the expected expectations have been met. He also added that Renta WEB has been very well received by both taxpayers and Tax Agency staff.

The President then opens the floor for the floor.

First to speak was Ms. Pilar Arxé Fonalleras, President of the Spanish Federation of Professional Associations of Tax Technicians and Tax Advisors, who thanked the President of the Forum for his opening remarks at the meeting, recognizing the role and work of the social collaborator. He also congratulated the Tax Agency for the implementation of Renta WEB, stating that it does indeed represent a significant change at an operational level that makes the task easier for both the social collaborator and the taxpayers themselves.

The representative of the Spanish Federation of Professional Associations of Tax Technicians and Tax Advisors continues by requesting an effort on the part of the Tax Agency so that IT development companies have the necessary documentation with sufficient notice, so that social collaborators can begin their work safely and with guarantees from the first day of the start of the campaign.

On the other hand, Ms. Pilar Arxé Fonalleras states that it is necessary, in relation to the submission of supplementary statements, that this can be done during the voluntary period.

He goes on to add that, just as in the 2015 Income Tax campaign, box 490 was used to obtain tax data, it would be very useful for social collaborators to obtain data from previous years that have not expired, since it is precisely during the campaign period when many taxpayers ask them to regularize their situation with respect to previous years.

He then adds that he understands that the objective of the AEAT is to extend Renta WEB to all taxpayers, but that, nevertheless, his opinion is that there are groups that will always require the intervention of a professional in their relations with the Administration.

Lastly, Ms. Pilar Arxé Fonalleras requests that, in view of the presentation used by the Director of the Tax Management Department, clarification be given as to whether there is any relationship between the refunds being made and the income collected by the Tax Agency, since the figures are very similar.

Mr. Rufino de la Rosa Cordón took the floor and, after thanking the representative of the Spanish Federation of Professional Associations of Tax Technicians and Tax Advisors for their congratulations regarding the implementation of Renta WEB, stated that many of the aspects he had pointed out had already been detected by the AEAT and were lines of action that were intended to be worked on. He goes on to point out that with the implementation of Renta WEB and its extension to other groups, the aim is also to unify the campaign calendar and that, as it would already be the presentation of a pre-declaration, this could be done from the first day regardless of the method chosen for it (online, in collaborating entities, etc.). On the other hand, Mr. Rufino de la Rosa points out that he agrees with Ms. Pilar Arxé Fonalleras that the extension of Renta WEB to all taxpayers does not necessarily mean that there are no certain groups that need the advice of tax professionals and, in this sense, work is already underway so that this pre-declaration system is extended to the programs used by social collaborators. As for IT development companies, he clarifies that the situation is going to change and they will be able to carry out their work with technical specifications similar to those of the Tax Agency and at the same time.

Mr. Rufino de la Rosa goes on to point out that the issue of additional payments had already been detected by the Tax Agency. Thus, it indicates that the purpose of the new notices that appear in the tax data is, on the one hand, for the taxpayer to take them into account when filing the declaration and, on the other, for the taxpayer who had omitted them to take advantage of the opportunity and incorporate them. The taxpayer regularizes voluntarily and the Tax Agency sees its workload reduced, which allows it to dedicate its resources to actions on other groups.

Regarding access to tax data from previous years, the Director of the Tax Management Department clarifies that they can be accessed, although with an electronic certificate or with Cl@ve PIN.

At this point, Mr. Alfonso Castro Martínez, Director of the Tax Information Technology Department, intervenes, pointing out that the security elements of the reference number are being reinforced and that it is expected that for the 2016 campaign it will be possible to access tax data from previous years with it.

Mr. Santiago Menéndez takes the floor and asks social collaborators that when they have incidents of lack of information in any of the offices of the AEAT , please, bring it to the attention of the Technical Secretariat of the Forum since for reasons of internal control the Tax Agency is interested in knowing about them and solving them.

Regarding this issue, Mr. Rufino de la Rosa states that the Tax Agency is very interested in ensuring that taxpayers who wish to regularise their situation voluntarily can do so, as this reduces conflict, workload and tax fraud.

Regarding the current balance between the returns being made and the income collected, Mr Rufino de la Rosa clarifies that this is entirely coincidental.

Regarding this matter, Mr. Santiago Menéndez clarifies that, in the tax figures managed by the Tax Agency, refunds are only conditioned by two elements: The first, the prior control filters and, the second, the funds that the General Directorate of the Treasury is making available to the Tax Agency.

Next, Mr. José Castaño Semitiel, Member of the Tax Affairs Committee of the General Council of Official Colleges of Social Graduates of Spain, takes the floor and asks whether the Tax Agency has the data on the filing of declarations through social collaboration.

Mr. Rufino de la Rosa answers that to date 4.3 million declarations have been submitted using the social collaborator certificate. He clarifies that this figure does not include the declarations that the tax professional has submitted with the reference number, electronic certificate or Cl@ve PIN of the taxpayer.

IV.- In development of the fourth point of the agenda , the President addresses those present to open a floor.

Ms. Esther Luque Sánchez, Member of the Board of Directors of the General Registry of Tax Advisors / Registry of Tax Advisory Economists, intervenes to point out a series of incidents that have occurred since the last meeting of this plenary session. Firstly, it indicates that in relation to community property, some Administrations of the AEAT are not accepting the qualification chosen by the taxpayer and are proceeding to assess it. Secondly, it requests that, in relation to Corporate Tax, the model be published on the Tax Agency website before 1 July, even if it cannot be submitted, since it is a model widely used by professionals and having it available in advance would allow work to be carried out that, otherwise, would be concentrated in less time. Thirdly, it requests that the procedure for correcting errors be simplified during the voluntary period. Fourthly, with regard to the supplementary declarations of informative declarations and specifically Form 184, he requests that the penalty not be included in the requirements. Finally, he also wants to request that the option of filing a negative tax return be included in Form 115, given that there are taxpayers who collect annual or half-yearly rents and currently have to deregister from the census for the quarters in which they do not have income and then re-register.

The President of the Forum takes the floor to comment that more than 25,000 people work at the Tax Agency, and therefore asks those present that when they detect behavior in an Administration of the AEAT that deviates from the general criteria, they bring it to the attention of the Technical Secretariat of the Forum, for analysis and, where appropriate, correction.

Next, Ms. Pilar Arxé Fonalleras intervenes, reiterating the request made by Ms. Esther Luque Sánchez, and requesting greater sensitivity on the part of the Tax Agency regarding the issue of community property.

Mr. Rufino de la Rosa then intervened and once again asked the representatives of tax professionals to inform this Forum of any incidents that may arise in their relations with the various offices of the Tax Agency. Regarding the issue of community property, he asks Ms. Esther Luque Sánchez to provide the documentation she has available in order to analyze it, since on this issue, after the last Instruction of the Tax Management Department there should not be any discrepancies, given that the objective of the same was to make the classification of community property more flexible so that whoever wished to continue paying taxes as they were doing could do so.

Regarding the Corporate Tax model, the Director of the Tax Management Department indicates that an attempt will be made to address the request as far as possible, taking into account the complexity of said model.

Mr. Rufino de la Rosa goes on to point out that, with regard to the issue of additional returns, the taxpayer does not understand why, depending on the result of his new declaration, he has to submit an additional return or a correction of the same. What the taxpayer wants is to file a substitute return. He also points out that with the implementation of Renta WEB, the Tax Agency can know at any given time whether the taxpayer has submitted one or several returns, regardless of whether they are submitted to a financial institution, so the necessary changes are being studied to simplify the procedure, which would also allow for savings in resources that could be used for other actions.

Regarding the issue raised in relation to form 115, the Director of the Tax Management Department points out that it will be analysed by the Working Group for the Analysis of Tax Regulations and Reduction of Conflicts of the Large Business Forum.

Ms. Esther Luque Sánchez intervenes again to ask about the status of the Immediate Supply of Information project ( SII ).

Mr. Santiago Menéndez takes the floor and states that the SII , whose draft Royal Decree already had the report of the Council of State, will not be able to be implemented on January 1, 2017, as planned, due to the fact that there is currently a caretaker Government. However, the Tax Agency still considers it a very important project. The President of the Forum goes on to point out that, with regard to social collaboration and new technologies, although the latter modify the current relationship model, certain groups of taxpayers will continue to need professional help in the adaptation process. He adds that the SII , as has already been commented on other occasions, will only be mandatory for large companies, VAT groups and REDEME companies, but it will be voluntary for the rest and, to do so, in this adaptation process they will need the help of tax professionals. He goes on to say that the Tax Agency sees the SII as an instrument that provides legal certainty to compliant taxpayers and an effective tool to speed up tax refunds.

Next, Mr. Rafael Gil March, member of the General Council of the Spanish Bar Association, spoke. He expressed the interest of tax professionals in having a forum where they can express their opinions on Spanish tax law in general and not just on specific aspects.

Mr. Santiago Menéndez intervened, first pointing out that one of the objectives of the Tax Agency is to advance in a cooperative relationship with social collaborators, which implies assuming a series of commitments by both parties, in line with what was achieved in the Large Companies Forum, where very significant progress was made, always by mutual agreement. The President of the Forum goes on to point out that, with regard to the subject of tax regulations, currently all modifications of a certain regulatory range or of significant scope have a public information phase, where tax professionals can provide whatever they deem appropriate. He added that this Forum can serve as a means of transmitting to the General Directorate of Taxes the documents that associations and colleges want to be taken into account. He also says that social collaborators can directly contact the General Directorate of Taxes requesting the creation of a working group or the holding of regular meetings, where issues related to regulatory changes can be discussed in a fluid manner.

He also states that his opinion is always heard, but through the established procedure, that is, by participating in the public information phase. He goes on to indicate that, however, they may request a new channel of communication on this matter from the Secretary of State or the General Directorate of Taxes.

Mr. Ángel Rodríguez Rodríguez, Director of the Planning and Institutional Relations Service, then intervenes, requesting that any questions or proposals in relation to form 720 or other matters that may be submitted for study by the Tax Agency be forwarded to the Technical Secretariat of this Forum.

Mr. Santiago Menéndez intervened and added that, especially in relation to Form 720, this is the time for them to submit to this Forum all the questions they wish to clarify.

Next, Ms. Esther Luque Sánchez intervened, calling for greater publicity when actions are carried out by the Tax Agency such as that of Form 720, since, in her opinion, there are people who have not submitted it because they were unaware that it affected them.

Mr. Santiago Menéndez states that the Tax Agency is responsible for enforcing the rules and that, although this Forum does everything possible to improve the channels of relationship with social collaborators, he understands that this is not the framework for discussing this issue. He went on to reiterate that the Tax Agency aims to advance cooperative relations and those areas of interest to both parties. He added that, as regards regulations, it is preferable to establish a direct channel with the General Directorate of Taxes.

The President of the Forum then asks if there are any further comments. There were no further statements, and he thanked everyone for their attendance and participation and closed the ninth plenary session of the Forum of Associations and Colleges of Tax Professionals.