Minutes of the meeting

 

Vice President of the Forum of Large Companies

Director General of the State Agency for Tax Administration

Ms. Soledad Fernandez Doctor

Members representing the Tax Agency

Director of the Tax Management Department

Mrs. Rosa Maria Prieto del Rey

Director of the Department of Financial and Tax Inspection

Manuel Trillo Alvarez

Director of the Department of Aduanas and Excise Duties

Ms. Nerea Rodríguez Entremonzaga

Deputy Director General of Special Procedures - Tax Collection Department

Carlos José Dorrego Anta

Central Delegate of Large Taxpayers

Carlos Javier Cervantes Sánchez-Rodrigo

Head of Systems of the Subdirectorate of Information Technology and Fraud Investigation of the Tax Information Technology Department

David Dávila Atienza

Members representing Large Companies

ACS

Tax Advice Director

Alfonso Moreno García

AMADEUS IT GROUP

Secretary of the Board of Directors

Jacinto Esclapés Díaz

SABADELL BANK

Deputy Director General Tax and Labor Advisory

Carlos Augusto Lázaro Rico

BANCO SANTANDER

Global Head of Taxes

Mrs. Carmen Alonso Peña

BBVA

Tax Discipline Leader

Manuel Díaz Corral

LA CAIXA

Director of Direct Taxation

Gonzalo Mendizábal Carredano

CEPSA

Fiscal Director

Alberto Martín Moreno

COFARES

Advisor to the Governing Council

Luis Valdeolmos González

EL CORTE INGLÉS

Director of the Tax Department

Luis María Sánchez González

ENDESA

Head of Tax Affairs

Mrs. Maria Muñoz Viejo

FCC

Director of the Tax Department

Daniel Gómez-Olano González

GENERALI ESPAÑA

Director of Accounting Area

Martí Jo Ruiz

IBERDROLA

Global Director of Tax

Mrs. Begoña Garcia-Rozado Gonzalez

IBERIA

Spanish Tax Lead

Mrs. Cristina Santana Negrin

INDITEX

Director of Tax Advisory

Andrés Sánchez Iglesias

MAPFRE

Tax Advice Director

Antonio Lafuente González de Suso

MERCADONA

Fiscal Director

Rafael Hilario López Villanueva

MICHELIN

Fiscal Manager

Mrs. Rosa María Peña García

NATURGY

Director of Taxation

Baltasar Gómez Febrel

RENAULT ESPAÑA

Tax specialist

Mrs. Almudena Fernández Miguélez

REPSOL

Director General of Economic and Fiscal Affairs

Luis Lopez-Tello and Diaz Aguado

SEAT

Director of Taxes and Customs

Mrs. Susana Sanchez Arenas

SIEMENS

Director of Taxes

Mrs. Ana María Moreda Galante

TELEFÓNICA

Tax Director Latin America

Miguel Iglesias San Martín

VODAFONE

Director of Tax Advisory

Javier Viloria Gutiérrez

Technical Secretariat of the Large Companies Forum

Technical secretary

Ignacio Fraisero Aranguren

On November 20, 2024, the twenty-ninth plenary session of the Large Companies Forum will be held, with the attendance of the aforementioned persons, and in accordance with the following

AGENDA

1. Opening of the session.
2. Approval of the minutes of the meeting held on July 3, 2024.
3. Summary of the different working groups of the Forum.
4. Urgent fiscal measures for the damage caused by the DANA.
5. Actions taken in relation to VAT fraud in the hydrocarbon sector.
6. CJEU ruling on the regional section of the Hydrocarbon Tax.
7. The Artificial Intelligence strategy in the Tax Agency.
8. Next call.
9. Other considerations, requests and questions.

1. Session opening

The Director General of the State Tax Administration Agency welcomes attendees to the twenty-ninth plenary session of the Large Companies Forum and outlines the topics to be discussed.

Firstly, the minutes of the previous session will be approved, if applicable.

Secondly, the various working groups carried out in the previous semester will be summarized, the measures adopted by the DANA will be explained, and the various actions taken regarding VAT fraud in the hydrocarbon sector will be reported.

Next, we will analyze the CJEU's ruling on the regional tax rate for hydrocarbons, and briefly outline the Tax Agency's Artificial Intelligence strategy.

A decision will also be made on the next session, and a question and answer session will be opened.

Without further delay, Ms. Soledad Fernández gives the floor to the Director of the Planning and Institutional Relations Service.

2. Approval of the minutes of the meeting held on July 3, 2024.

Ignacio Fraisero thanks those present and points out that, after submitting the draft minutes of the meeting of July 3, 2024, no comments have been received.

Since there were no observations or suggestions for modification during the session, the minutes were approved.

3. Summary of the different working groups.

Next, for the third item on the agenda, the Director of the Tax Agency turned the floor over to the Director of the Tax Management Department, who summarized what was discussed in the working group on the analysis and rationalization of indirect tax burdens.

Ms. Rosa Prieto points out that it was the Deputy Director General of Tax Technique who was responsible for commenting on the approval of the new VAT model 303, which was adapted to the new tax rates and the recent figure of corrective self-assessments. Regarding corrective self-assessments, the working group identified different situations based on direct debit, and the questions surrounding this issue were resolved.

The second point discussed in the group was the information campaign, having approved the modifications to models 123, 210, 216, 193, 296, 238, 239, 234, 235, 236, 038, 282, 296, 159, 283. Regarding the modifications that were being processed, reference was made to the modification of models 172, 182, 192, 193, 194, 198, 289, 345, 346, 190, 322, 390, 036, 037, 030.

The Director of the Management Department summarized the questions posed by representatives of large corporations in the working group, as well as the responses provided by the Tax Agency.

Regarding the Excise Tax Working Group, whose meeting was held on October 30, the summary was provided by the Director of the Customs and Excise Department.

Ms. Nerea Rodríguez stated that the main modifications introduced in the draft order to modify the obligation to maintain accounting records for commercially manufactured products were explained, based on the comments received during the public information process.

Regarding the Electricity Tax, the working group discussed the changes to Form 560, while regarding the Tax on the Value of Production of Electricity, the changes made to Form 591 were detailed.

Finally, the Director of the Customs and Excise Department summarizes the handling of the change in tariff classification criteria for fuel and the documents that can be used to justify the tax regime applicable to oils classified under code NC2707.

Since there were no questions from those attending the Forum, the Director of the Tax Agency continued with the next item on the agenda.

4. Urgent fiscal measures for the damage caused by the DANA.

Ms. Soledad Fernández points out that, as a result of the tragedy that occurred in Valencia, multiple measures were adopted that affect all departments, so she first gives the floor to the Director of the Tax Management Department.

Ms. Rosa Prieto begins her presentation by referring to the aid open to companies and professionals, approved in Royal Decree-Law 6/2024, which was partially modified by Royal Decree-Law 7/2024. These grants range from €5,000 for the self-employed to €150,000 for companies depending on their volume of operations.

There are two requirements to receive aid: have filed an Personal Income Tax return or corporate tax return and remain registered until June 30, 2025. The form was published on the Agency's website and requires completing the identification section, indicating a bank account for the transfer, and submitting a statement of liability for the damages suffered.

Likewise, the deadline for filing self-assessments and declarations for economic activities with a value of less than €6,000,000 is suspended, provided that there is a tax domicile, premises, or establishment in the affected area, as defined in the annex to Royal Decree-Law 6/2024. Individuals who do not carry out economic activities will also be entitled to an extension of the deadline for filing self-assessments.

This information has been published through a FAQ on the Agency's website. A calendar has also been created for taxpayers affected by the DANA to facilitate compliance and improve assistance.

On the other hand, all deadlines relating to the procedures are suspended. For example, the deadlines for filing requests, submitting allegations, and resolving procedures are suspended, as are the suspension of actions not strictly necessary for the Administration, and the expiration of any procedures that have been initiated.

Finally, the deadline for submitting billing records for the month of November has been extended to December 16, 2024.

Below, Mr. Carlos Dorrego discusses the measures adopted in the area of tax collection, starting with the creation of a specific deferral for a period of 24 months with a 6-month interest grace period. Certain tax obligations are included that, as a general rule, cannot be deferred (withholdings, passed-on taxes, and installment payments of corporate income tax), and a maximum limit of 50,000 euros is established.

The payment deadlines for debts that had already been deferred or divided into installments prior to the entry into force of the Royal Decree-Law have also been extended. Likewise, the possibility of reconsidering a modification to the conditions of previously granted deferrals and installment payments has been established, and the possibility of extending the deadline for the second payment of Personal Income Tax from November 5 to February 5, 2025.

Secondly, a series of measures have been adopted to ease the burden (responding to requests, submitting allegations, filing appeals and complaints). Also, in the case of auctions conducted by the Tax Agency, an extension of the deadline is established, as well as the possibility of a refund of the auction price or any deposits made by bidders.

Finally, all aid resulting from this regulatory change and the resulting tax refunds are declared non-attachable.

The Director of the Inspection Department reports that the decision has been made to freeze the deadlines for taxpayers in the affected area, unless the taxpayer themselves expresses interest in continuing the proceedings and this is reflected in the diligence.

In the case of groups, some dependent entity in the affected area may have suffered serious damages, loss of documentation, etc. If the group is less than €6,000,000, it would be covered by the regulation; On the other hand, groups with a tax of more than €6,000,000 can always resort to the option provided by Article 150 of the General Tax Law, which contemplates force majeure. Regarding groups, Mr. Manuel Trillo points out that it is more difficult to clearly select the subjective scope of application, since there may be dependent entities with damage to a facility but that do not have their tax domicile in the affected area. However, the director affirms that any problems that arise will be addressed.

The Director of the Department of Customs and Excise adds that the deadline extension also applies to the accounting and reporting obligations of establishments registered in the municipalities in the affected areas. Regarding foreign trade, this is excluded from the Royal Decree-Law, since it is the exclusive responsibility of the Union, and there is no authority to regulate it at the national level. However, Ms. Nerea Rodríguez stated that the Tax Agency intends to take the current situation into consideration.

The Director of the Tax Agency thanked the participants, asking the representative of Banco Santander if the delay in the second installment of Personal Income Tax would apply to taxpayers with tax domiciles in the affected area.

Carlos Dorrego replies that it effectively applies to all taxpayers in the province of Valencia, whether or not affected by the DANA. The Agency Director also thanks all financial institutions for their cooperation in not burdening these taxpayers with the second installment of Personal Income Tax.

The Iberdrola representative asks if it's possible to regulate or approve a special regime for corporate donations and whether the expense will be deductible. Ms. Soledad Fernández responds that this request will be forwarded and, in any case, supported by the Tax Agency.

5. Actions taken in relation to VAT fraud in the hydrocarbon sector.

The Director of the Tax Agency gives the floor to the Director of the Inspection Department to discuss this agenda item. Mr. Manuel Trillo comments that this is an old fraud, which has been growing despite the Agency's efforts to eradicate it and has ended up becoming a fraud related to organized crime.

However, the Director of the Inspection Department highlights the efforts and progress that have been achieved thanks to the cooperative relationship, as they have worked directly with the sector to find the best measures and incorporate them into regulations. Among the regulations, which have not yet been approved by Parliament, are the amendment to the VAT Law, the amendment to its annex, and the amendment to the Regulations.

Regarding the Regulation, the monthly VAT return must be filed by the owners and extractors of tax warehouses. The Law modifies the fifth section of article 19 to indicate that the non-customs warehouse regime is always finalized by the person who extracts the warehouse. Thus, with the transaction carried out by that person, the regime will be finalized, and that person will be responsible for guaranteeing the VAT accrued on the first domestic transaction that occurs after the regime is finalized.

On the other hand, the Annex to the Law sets out the guarantee that must be provided by the extractor, the owner of the merchandise that carries out the action or, in other words, the final depositor. However, those who hold the status of authorized economic operator are exempt from the obligation to provide it, as well as those who hold the status of trusted operator, which will be the one to whom the Tax Administration grants this category based on compliance with a series of requirements: having had an activity volume of at least one million liters in the previous year, having been active for at least the previous three years, being registered with the REDEF and meeting certain financial solvency requirements required of authorized economic operators.

Regarding the amount, the Director of the Inspection Department indicates that the guarantee must be 110% of the accrued VAT corresponding to the volume extracted at any given time.

The guarantee may consist of an advance payment of VAT at the time of extraction or a guarantee from a credit institution, financial institution, or insurance company accredited in the European Union.

For operators who have not previously traded or who do not yet have "trustworthy" status, the minimum guarantee to begin trading is three million euros.

On the other hand, the centralized management of the guarantee will be carried out by the National Fraud Investigation Office.

The warranty will be updated and adjusted monthly to the liters as the extraction is carried out. If the warranty expires, the bonded tank cannot be withdrawn, and the warranty will have to be reinstated.

Operation will be based on prior authorization from the Tax Administration for extraction. When extraction is to take place, the operator will have to request authorization from the Administration, which will verify that there is sufficient guarantee for the volume to be extracted. Verification of the sufficiency of the guarantee will be carried out through electronic communication mechanisms with the tax warehouses.

The law will establish a security clause, requiring the owner of the bonded warehouse to confirm that the person extracting the fuel is an authorized economic operator—in which case no guarantee is required—or a reliable operator—in which case a registry will be maintained and no guarantee will be required—or, otherwise, prior authorization will be required for the extraction. If the obligor fails to provide proof of this, he or she would become jointly liable for any outstanding payments.

Once the ministerial order is published, a transitional period will be necessary to avoid paralyzing the market and ensure that all requirements are gradually met. However, although fraud in this sector is very high in quantitative terms in terms of the amount lost, few operators are involved, so the Director of the Inspection Department hopes that, with these measures, these fraudulent operators will disappear completely.

Following the director's intervention, the Repsol representative thanked the Agency, and specifically the Agency's Management and the Inspection and Customs Departments, for their willingness to address this issue. In this case, continued work on this issue not only reduces tax fraud but also prevents unfair competition from those who, through price, displaced those who actually paid taxes from the market. In his opinion, these measures are very positive, as he notes that the level of fraud in the market has been significantly reduced, with numerous operators closing their doors.

The Cepsa representative also welcomes the measures, believing that, on the demand side, there were numerous operators taking advantage of infinitely lower prices, as is the case with some service stations. The Director of the Inspection Department adds that, indeed, without the collaboration of the demand side, supply-side fraud would not work, and that to eradicate the problem, it is necessary to address both the supply and demand sides.

6. CJEU ruling on the regional section of the hydrocarbon tax.

The Director of the Tax Agency gives the floor to the Director of the Department of Customs and Excise Taxes to discuss the ruling of the Court of Justice of the European Union on the regional section of the Hydrocarbon Tax.

Ms. Nerea Rodríguez reports that the Court of Justice of the European Union declared that the differentiated rate of the Hydrocarbon Tax by region was contrary to EU law and that, following this ruling, the Supreme Court issued three rulings.

The first ruling states that those liable for legal repercussions have the right to request and obtain a refund of the Hydrocarbon Tax for the autonomous region's portion declared illegal, and that the only exception is if the amount has been passed on to the buyer.

The Director of the Department of Customs and Excise adds that the second ruling addresses the legitimacy of the end consumer, and the third addresses the jurisdiction of the Tax Agency in relation to regional treasuries. Since there were no questions from the company representatives, we moved on to the next item on the agenda.

7. The Artificial Intelligence strategy in the Tax Agency.

David Dávila outlines the Tax Agency's strategy for artificial intelligence, accompanied by a presentation.

First, it justifies adopting the strategy at this time due to the widespread deployment of artificial intelligence, its transformative potential, and the significant progress it has made in recent years. Likewise, the need to develop an artificial intelligence strategy is driven by a political mandate from several institutions, including the European Union, which focuses on artificial intelligence as one of its main pillars and will publish the artificial intelligence regulation in June 2024.

At the Tax Agency level, artificial intelligence also appears as a fundamental axis in the Strategic Plan. The goal of the strategy is to use this transformative capacity for the benefit of the taxpayer.

David Dávila states that the artificial intelligence strategy seeks to promote the use of artificial intelligence in the Tax Agency and establish safeguards for its development and use.

A working group was created a year ago to define this strategy, divided into five parts: The first was strategy, the second was promotion and identification of opportunities, the third was methodology to ensure quality, the fourth was dissemination, and finally the regulatory subgroup.

The first objective is to promote the use of artificial intelligence to facilitate voluntary compliance and improve tax assistance, combat tax fraud, and improve internal productivity.

The second part, the impulse part, has two missions: Maintain the solutions catalog and manage demand, collecting new proposals from departments and prioritizing them. Within this subgroup, a screening test has been defined to assess whether the project makes sense.

Potential uses include traditional predictive models (for improving taxpayer assistance, detecting fraud, and preventing financial insolvency), computer vision (for Customs, including scanner detection), and generative guidance (all ChatGPT-type models) for improving productivity.

Of particular importance is the Agency's need to equip itself with expert human resources in artificial intelligence, as well as new hardware and software systems and capabilities.

Another objective of the strategy was to establish guarantees so that all models meet previously defined quality standards. To achieve these guarantees, all projects must follow certain guiding principles.

These principles are: the principle of responsibility since all Artificial Intelligence must respect the legal system; the principle of equity in the results obtained; the principle of safety, which is achieved with human supervision; and the principle of transparency.

In practice, these guarantees are achieved through a defined methodology that requires monitoring data quality, effective bias prevention, data protection, ongoing human oversight, and continuous improvement through annual review by all departments of the methodology applied to the specific project.

Next, Ms. Soledad Fernández asked if there were any questions or comments. The FCC representative intervened, believing that the Tax Agency is ahead of other administrations in matters of artificial intelligence, highlighting its use in the area of virtual assistance. However, the representative believes that there are risks related to the right to privacy or excessive control, so he considers it positive that the Agency explains to the taxpayer what software is used in this artificial intelligence, what data is being included, what algorithms are being used, as well as that the decisions by the specific actuary who uses said data are motivated. It also maintains that the principle of transparency is one of the fundamental principles that should govern this matter.

The Agency Director responded that transparency is indeed very important, but that applications were already being used that save significant time in taxpayer selection, information and assistance models, with Zújar, etc.

8. Next call.

The Director of the Tax Agency announces that the next meeting is expected to be held in June 2025.

Ms. Soledad Fernández then moved on to the next item on the agenda, giving the floor to the Director of Inspection, who will comment on some issues raised by the representatives to the Forum's Technical Secretariat.

9. Other considerations, requests and questions.

Manuel Trillo advances that the first of the questions concerns the possibility of a future existence of a pre 322 similar to the pre 303. It started with VAT 303, although there are complications due to differentiated regimes, the pro rata rule or special regimes.

In the Director's opinion, the pre 322 presents even greater difficulties than the pre 303; However, better information will become available, with electronic invoicing becoming especially important, which will undoubtedly allow for improvements.

The second issue concerns the imperative of an EU regulation that requires the Kingdom of Spain to conduct a conflict of interest analysis regarding the aid to be granted and derived from the European recovery and resilience funds.

The conflict of interest analysis must be conducted prior to granting the aid and must focus on the beneficial owner, who is defined as the natural person with direct decision-making capacity with a participation percentage that exceeds certain limits.

When the Community Directive and the Law on the Prevention of Money Laundering and Combating Terrorism regulate beneficial ownership, they exempt listed companies, considering that they are subject to other public information regulations that already guarantee knowledge of such beneficial ownership.

These rules also stipulate that, when it is impossible to determine the beneficial owner, the Board of Directors shall be deemed to be the owner.

On the other hand, Additional Provision 112 of the 2023 Budget Law assigns to the Ministry of Finance, specifically to the State Tax Administration Agency, the creation of a tool to verify conflicts of interest, which is achieved by comparing data from tax forms with the information provided by notaries and registrars.

A Ministerial Order created a tool, Minerva, that allows for cross-checking with real ownership. It is mandatory that the body granting the aid consult Minerva beforehand.

When there is no beneficial owner, a black flag appears, under which the granting body is obliged to directly request the beneficial owner from the intended beneficiary and then incorporate it into Minerva.

The problem arises because there is a rule that excludes listed companies from determining the beneficial owner, but the Kingdom of Spain has an obligation to the Commission, and the Tax Agency must verify whether a conflict of interest exists.

Finally, the Director believes the solution must come through a cooperative relationship, through the goodwill of both parties, since failure to declare the beneficial owner is a black flag, and the Agency cannot do anything else for the time being.

The representative of Banco Santander expressed her gratitude to the working group on Pillar II, which has already met once with representatives from six companies.

The Iberdrola representative reports that the group is not intended to be too large for participants to be agile, and will therefore try to convey the issues discussed and act as a vehicle for communication.

There being no further interventions, Mr. Soledad Fernández closed the twenty-ninth plenary session of the Large Companies Forum.