Minutes of the meeting

Large Companies Forum

MINUTES OF THE PLENARY SESSION 2/2022

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 Collection Department

Mrs. Virginia Muñoz Fernández

Director of the Department of Aduanas and Excise Duties

Ms. Mª Pilar Jurado Borrego

Central Delegate of Large Taxpayers

Mr. Manuel Trillo Alvarez

Head of the National Office of International Taxation - Department of Financial and Tax Inspection

D. Luis Ramón Jones Rodríguez

Members representing Large Companies

ACERINOX

General secretary

Mr. Luis Gimeno Valledor

ACS

Tax Advice Director

Mr. Alfonso Moreno Garcia

AMADEUS IT GROUP SA

Secretary to the Board of Directors

Mr. Jacinto Esclapés Diaz

SABADELL BANK

Deputy Director General Tax and Labor Advisory

Mr. Carlos Augusto Lazaro Rico

BANCO SANTANDER

Group Executive Vice President

Mrs. Carmen Alonso Peña

BBVA

Tax Discipline Leader

Mr. Manuel Diaz Corral

LA CAIXA

Director of Tax Advisory

Mr. Manuel Alfonso García Rodríguez

CEPSA

Fiscal Director

Mr. Alberto Martin Moreno

COFARES

Advisory Board of Directors

Mr. Luis Valdeolmos Gonzalez

EL CORTE INGLÉS

Director of the Tax Department

Mr. Luis Maria Sanchez Gonzalez

ENDESA

Head of Tax Affairs

Mrs. Maria Muñoz Viejo

FCC

Director of the Tax Department

Mr. Daniel Gómez-Olano González

IBERDROLA

Head of the Department of Local, Regional and Energy Taxes

D. Jorge Corral Garcia

MAPFRE

Tax Advice Director

Mr. Antonio Lafuente Gonzalez de Suso

MERCADONA

Fiscal Director

Mr. Rafael Hilario Lopez Villanueva

MICHELIN

Fiscal Manager

Mrs. Rosa María Peña García

NORFIN HOLDER

Director of Tax Advisory

José Antonio Gibello Saiz

RENAULT

Director of Tax and Customs Affairs

Mr. Felix Ruiz Madarro

REPSOL

Senior Manager Tax Global Policies and Corporation - Tax Affairs Directorate

Mr. Alfredo Manero Ruiz

SEAT

Director of Taxes

Mr. Francisco Javier Baulenas Setó

SIEMENS

Director of Taxes

Mrs. Ana María Moreda Galante

TELEFÓNICA

Fiscal Director

D. Jeronimo Payan Prieto

VODAFONE

Director of Tax Advisory

D. Javier Viloria Gutiérrez

Technical Secretariat of the Large Companies Forum

Technical secretary

Mr. Ignacio Fraisero Aranguren

The twenty-fifth plenary session of the Large Companies Forum will be held on November 15, 2022, with the attendance of the people mentioned above, and in accordance with the following:

AGENDA

1. Opening of the session.
2. Approval of the minutes of the meeting held on June 21, 2022.
3. Summary of the different working groups of the Forum
4. Next call.
5. Other considerations, requests and questions.

1. Session opening

The session is opened by Ms. Soledad Fernández Doctor, General Director of the State Tax Administration Agency (hereinafter, the Tax Agency), in her capacity as Vice President of the Large Business Forum, who, after greeting those in attendance and thanking them for their presence and support for this meeting, reiterates what she has stated on previous occasions regarding the fact that it is the will of the institution she represents to continue making progress in the area of cooperative relations, so that a new model of relations between the Administration and businesses can be put into effect, which will facilitate the development of the different activities entrusted to them by both. He also comments that he wishes to thank the proposals received in relation to the interim report on the application of Law 11/2021, on measures to prevent and combat tax fraud, which Spain must present in the 4th quarter of 2022 in compliance with the commitments assumed in component 27 of the Recovery, Transformation and Resilience Plan. He added that the final report must be submitted in the fourth quarter of 2023 and that the collaboration of the Forum's member entities will be requested again for its preparation. On the other hand, the Director General points out that at this plenary session, after approving, where appropriate, the minutes of the previous meeting, the Directors of the Customs and Excise Departments and Tax Management, as well as the Central Delegate of Large Taxpayers and the Head of the National Office of International Taxation (ONFI) will present the results and perspectives of the different Working Groups. Finally, Ms. Soledad Fernández Doctor reports that, as already communicated through the Technical Secretariat of the Forum, a meeting of the Special Taxes working group is scheduled to be held on December 1 in relation to Taxes on non-reusable plastic packaging and on the disposal of waste in landfills, incineration and co-incineration of waste, applicable from January 1, 2023. He added that, given the interest expressed by numerous companies, the invitation to participate in the meeting has been extended to all members of the Forum who wish to do so and to address specific questions and doubts that may arise. It also reports that, given the foreseeable breadth of groups that will be affected, the Customs and Excise Department is intensifying its dissemination campaign, with the participation of the ADI .

2. Approval of the minutes of the meeting held on June 21, 2022

Ms. Soledad Fernández Doctor gives the floor to Mr. Ignacio Fraisero, Director of the Planning and Institutional Relations Service and Technical Secretary of the Forum, who points out that the minutes of the 24th session of the Plenary Session of the Large Business Forum were sent to the members of the Forum as documentation attached to the notice of this plenary meeting and adds that, since no comments have been received and if there were none at this time, it would be definitively approved. As no observations were made, the minutes of the plenary session of June 21, 2022 are hereby declared approved.

3. Summary of the different working groups of the Forum

Ms. Soledad Fernández Doctor indicates that during the second half of 2022 the four working groups of the Forum have continued with their usual activity and each of them has held a meeting.

She then gives the floor to Ms. Pilar Jurado Borrego, Director of the Customs and Excise Department, in order to comment on the activity of the Excise working group .

Ms. Pilar Jurado comments that the following matters were discussed at the working group meeting held on 26 October:

• Regarding the restructuring of the Tax on Fluorinated Greenhouse Gases: The companies pointed out difficulties in determining the quantity and type contained in the equipment pre-loaded with these gases, to which the representative of the Customs and Excise Department responded that the regulations establish presumptions applicable in the event that the equipment or devices contain fluorinated greenhouse gases, but the quantity and type are unknown.

• Regarding the Tax on Non-Reusable Plastic Packaging, the attendees raised the following doubts and questions that were answered by the representatives of the Administration:

  • Certification of the quantity of recycled plastic in imports or intra-community acquisitions: The accreditation of the kilograms of non-recycled plastic must be carried out in accordance with the provisions of article 77 and the tenth transitional provision of Law 7/2022, of April 8, on waste and contaminated soils for a circular economy. Thus, the transitional provision states that, during 2023, a “responsible declaration signed by the manufacturer” will be accepted for these purposes. Likewise, the means of proof are assessed in the law: certification by an accredited entity or a responsible declaration signed by the manufacturer (this accreditation is valid exclusively for the year 2023).

  • Estimation of the quantity of plastic in imports or intra-community acquisitions: The regulations governing the tax do not allow an objective estimate of the tax base in these cases.

  • Certification of tax paid to request tax refund: It must be carried out with the document that proves its legal impact or its billing or certification in accordance with the provisions of article 82.9 of Law 7/2022. Justification must be provided if requested by the body processing the refund request.

  • Unification of the self-assessment model and the refund request model: The Ministerial Order by which the models are to be approved complies with the provisions of article 82 of Law 7/2022, which differentiates between the two. However, once the tax comes into force, it could be assessed whether it is appropriate to structure the exercise of both powers differently when the same operator is both an importer and an intra-Community purchaser.

  • Plastic Identification Code (PIC): Intra-Community purchasers of products subject to the tax must obtain a CIP from the managing office of the territorial tax registry; not so the importers of said products.

  • Accounting for protective plastic packaging (secondary and tertiary packaging): They are products subject to tax in accordance with article 68 of Law 7/2022, and therefore must be recorded in the manufacturer's inventory accounting or in the inventory record book of the intra-Community purchaser.

  • Threshold of 5 kilograms per calendar month for imports: You must complete the information in the DUA import.

  • Regulatory development of the Law: Since Law 7/2022 is very detailed, such development is not planned, although the models will be approved by Ministerial Order.

• Regarding the registration of production facilities in the Territorial Registry of the Special Tax on electricity: The participating entities highlighted the existence of a delay in obtaining the CIE of L1 by the electricity producing facilities; For their part, the representatives of the Tax Agency indicated that a producer, in order to carry out the taxable event of the tax, must have a CIE with a taxpayer activity key (LC) and that to benefit from the exemptions included in articles 94.5 and 94.7 LIE , must have a CIE L0 and L1, respectively. Thus, it was clarified that a production facility with CIE with activity code L0 would have the electricity it produced and used for its production activity exempt, so registration as L1 would only make sense if the electricity it used for its production activity was that which it acquired from a third party, for which the exemption in article 94.5 LIE would not be sufficient. Participants were also asked to submit a list of operators affected by delays, so that the matter could be forwarded to the relevant Management Office and, where appropriate, the appropriate procedures could be expedited.

• Regarding form 591 (Tax on the value of the production of electrical energy, annual declaration of operations with taxpayers): It was reported that the Ministerial Order regulating the model is being amended so that taxpayers only have to declare the amounts paid corresponding to the electricity incorporated in the first and second quarters of 2021, since the amounts corresponding to the electricity incorporated in the third and fourth quarters should not be subject to declaration as the tax was suspended.

• Regarding the transposition of Directive 2020/262 in relation to intra-Community movement: The representative of the Customs and Excise Department reported that the Commission had already been informed that the Spanish Administration planned to implement all the modifications to the EMCS in February 2023. The main features of the new guaranteed delivery system were also summarised and it was clarified that the Directive applied to all Member States.

• Regarding the new Ministerial Order approving the procedure for refunding the Hydrocarbon Tax on diesel fuel for professional use: Representatives of the AEAT explained that this essentially involves the full implementation of monthly frequency in refund management.

• Regarding Implementing Decision (EU) 2022/197 of January 17, 2022: It was announced that the fiscal marker for diesel and kerosene ACCUTRACE had been established^TM PLUS, although Solvent Yellow 124 could continue to be used during the transitional period.

To conclude her speech, Ms. Pilar Jurado points out that, in relation to the Tax on Non-Reusable Plastic Packaging, it is important to keep in mind that its objective is environmental, that is, the reduction of non-reusable plastic consumption. The report indicates that the Administration is aware of the complexity involved in its practical application for both companies and the Tax Agency, but that the regulations do not allow for an objective estimation system. In this regard, the Director of the Customs and Excise Department adds that, in view of the entry into force of the tax on January 1, companies would have to prepare the information and that one element of contrast that they could use is the quantity of plastic that they take to be recycled, normally through waste removal companies, which they could extrapolate. Finally, he reiterated that the Tax Agency is aware of the difficulties, but that it will have to apply the tax, as will companies, and that they will have to contribute to guaranteeing the traceability of waste management.

The General Director then thanks Ms. Pilar Jurado for her intervention and offers the floor to those present in case they wish to make any comments or questions.

First, Mr. Félix Ruiz Madarro, representative of Renault, intervenes to ask whether the “responsible declaration” admissible during 2023 has to be made by the taxpayer in the case of imports, to which Ms. Pilar Jurado responds that, indeed, it would be up to the importer, although the information must be provided by the manufacturer.

Mr. Daniel Gómez-Olano González, representative of FCC, then expressed his concern about this issue and pointed out that, in his opinion, complying with the obligations of this tax will be almost impossible, not only for companies, but also for the Administration. He added that this case is paradigmatic in terms of poor legislative processing. He also indicated that many of the companies present at the meeting want the Administration to propose a regulatory change after studying alternatives that, in this area, have been implemented by other countries in our environment such as the United Kingdom or Italy.

Ms. Pilar Jurado reiterates that, as is known to all those present, the tax has an environmental objective, the reduction of non-reusable plastic packaging, and that in its processing, which has had a period of public hearing and information, the Ministries of Finance and Civil Service and the Ministry of Ecological Transition and Demographic Challenge have collaborated. However, it reiterates that the Administration is aware of the difficulties involved in its practical application and that it involves the introduction of modifications in the taxpayers' management systems. She also points out that one of the reasons why a meeting of the Special Taxes working group will be convened on December 1, as the Director General has commented, is precisely to find out how companies are progressing and what problems they are encountering and to be able to assist them and provide them with the necessary help. Finally, Ms. Pilar Jurado states that all the observations and proposals received from the different sectors are being analyzed, studied and, where appropriate, sent to the corresponding body, and that she is also committed to analyzing the solutions adopted by the countries mentioned.

Next, Mr. Francisco Javier Baulenas Setó, representative of SEAT, took the floor. After pointing out that both the Administration and companies will have to allocate a large amount of resources to managing this tax, he proposed that the Tax Agency consider implementing valuation agreements, similar to those that exist for other taxes, so that companies could use an estimation system based, for example, on a large sample of their most significant suppliers, the result of which could be extrapolated, thus avoiding having to control and request information on recyclable plastic from thousands of suppliers, and undoubtedly contributing to simplifying the entire process. He adds that the development of some similar instrument could indeed be considered a good help from the Tax Agency.

The Director of the Customs and Excise Department replies that she agrees that an instrument similar to prior valuation agreements would make the matter easier for companies and that, although they represent a significant administrative burden for the Administration, it could be considered to assume it. He adds that the problem, however, is that there is no legal basis for doing so. The Tax Agency is analysing all the proposals received in order to verify whether, legally, any other interpretation of the law could be made that would contribute to simplifying the entire management process.

The SEAT representative intervened again to reiterate what has already been said in other meetings about this tax, which is that it is not expensive, but putting it into practice involves great complexity.

Ms. Soledad Fernández Doctor then states that, although it is a complex task for everyone, the approved regulations must be complied with. However, he said that various avenues would be explored to see if it were possible to introduce a measure that would simplify the management of the tax. The Director General adds that the Tax Agency cannot make a commitment in this regard, given the approved regulatory framework, but that, if there is any progress on December 1, it will be reported at the meeting of the Special Taxes working group.

Since there are no further interventions, Ms. Soledad Fernández Doctor indicates that, in relation to the working group for the Analysis and rationalization of indirect tax burdens , the Director of the Tax Management Department will speak first to comment on the issues of the management area and, then, the Head of the National Office of International Taxation will present those of the scope of the Financial and Tax Inspection Department.

Ms. Rosa María Prieto begins her presentation by pointing out that the working group met once during the second half of the year, specifically on October 19, and that she will highlight the following issues discussed:

• Regarding the 2022 informative declaration campaign, the Deputy Director General of Tax Technology explained the modifications that would affect the different declarations, although she clarified that these changes would not be very significant. He highlighted the following as the most innovative issues:

  • At the end of August, Order HFP/823/2022 was published, approving model 345 and modifying model 187.

  • In relation to the projects that were being processed, it was pointed out that the publication of the ministerial order approving the informative declarations relating to virtual currencies was subject to the approval of the Regulations that regulate them.

• Regarding actions to improve the quality of information provided by companies, representatives of the Tax Agency commented on the following, among others:

  • Taxpayers included in the SII : We inform you of the communications that the Tax Agency is sending to companies, since a stagnation in the level of comparison has been perceived, due, above all, to discrepancies in the number of the invoice received. In this regard, it is recalled that this number must match the invoice number of the issuer and that a series of recommendations regarding its coding are published on the Tax Agency website. It is also noted that the improvement in the data provided has a direct impact on the data that the Administration subsequently makes available to taxpayers, making it easier for them to prepare their tax returns.

  • Sending communications to certain financial institutions to remind them that the NIF of the communities of owners must be reported with the letter H; It is also mentioned that the third-party consultation service for census purposes is available, which facilitates the purification of the identifying data included in a declaration, before submitting it.

  • Model 159 (Informative Declaration. Annual declaration of electricity consumption): It has been observed that the cadastral reference is sometimes omitted or is incorrect. In this sense, the importance of data is highlighted, in order to be able to make a correct allocation of consumption and expenditure. It is also reported that Royal Legislative Decree 1/2004, of March 5, approving the revised text of the Real Estate Cadastre Law, establishes the obligation for the cadastral reference to be included in electricity contracts.

  • Form 236 (Declaration of information on the use of certain cross-border mechanisms): It is noted that a reminder will be sent to those who were included in the communication models for cross-border mechanisms, indicating that the deadline for submitting the declaration of those used in 2021 is from October 1, 2022 to January 2, 2023.

• Regarding Corporate Tax, it was reported that the draft ministerial order would be processed on the same dates as the previous year, since the publication of the order had been brought forward considerably in 2022 (May 4). Furthermore, it was indicated that both the ministerial order and the registration designs would have to be adapted to include the minimum taxation of article 30 bis of Law 27/2014, although an attempt would be made to anticipate the registration designs so that, through them, it would be possible to know in a more concrete way what the content of the ministerial order would be.

Next, Mr. Luis Jones Rodríguez, Head of the National Office of International Taxation, took the floor. After apologizing on behalf of Mr. Javier Hurtado Puerta, Director of the Department of Financial and Tax Inspection, who was prevented from attending the plenary session due to scheduling problems, he pointed out that at the meeting of the working group, the representatives of his Department basically presented two issues:

• Model 220 Clearance Engine: It was indicated that this was a very complex liquidation and that the purpose of the tool was to provide an aid instrument for the correct liquidation of the Tax to entities that pay taxes under the Corporate Tax tax group regime, since it allows the carry-over of amounts pending compensation, such as negative taxable bases. The importance of the tool for the Administration was also highlighted, as it links with its strategy of providing taxpayers with all the information available to facilitate the completion of their declarations. Some companies, meanwhile, raised objections regarding the underlying criteria of the settlement engine itself. Representatives of the Tax Agency indicated that the tool was under constant development in order to improve it and provide it with new functionalities and to correct any problems that may arise. Finally, it was noted that approximately 64% of respondents had used the calculation engine.

• New regulation of requirements of the software billing: It was explained that Law 18/2022, of September 28, on the creation and growth of companies, establishes the universality of the obligation of B2B electronic invoicing, as well as that the invoice must contain information on payment statuses. For this reason, it was noted that, although at first it seemed that companies under the SII were not going to be affected by the new electronic invoicing regulations (still in process), finally, it will have an impact on them, since the information provided through the SII is not sufficient to comply with the new information obligations provided for by Law 18/2022, which is very brief and is also pending regulatory development, which causes some uncertainty and does not allow going into details. Companies, for their part, stressed that providing additional information would entail additional costs. Finally, the representatives of the Tax Agency at the meeting indicated that it would be very useful to have the case studies that the companies participating in the Forum could provide.

The General Director then thanks Ms. Rosa María Prieto and Mr. Luis Jones for their interventions and offers the floor to those present in case they wish to make any comments or questions.

First of all, Ms. Carmen Alonso Peña, representative of Banco Santander, took the floor to indicate that, in relation to forms 200 and 220, she understood that at the meeting it was agreed that companies would send any queries they needed in relation to the structure of the minimum tax. He added that, in order to request information from their organisations, it would be advisable to hold a special meeting on this subject in order to find out the Tax Agency's approach regarding the information required and its format.

Ms. Rosa María Prieto responds that, fundamentally, the purpose of trying to anticipate, as far as possible, the designs of the Corporate Tax model registries is to enable companies to know, in advance of the publication of the ministerial order, what the structure and content of the information that will be required in relation to the minimum tax will be. He added that once companies have the registration designs, there would be no problem in holding a meeting to discuss any contributions that might be made.

Next, Mr. Javier Viloria Gutiérrez, representative of Vodafone, intervened to indicate that the problems of contrast in relation to the invoice number received are motivated, above all, by technical issues, since the computer systems of some companies include zeros, hyphens or other symbols that the Tax Agency application does not recognize. Ms. Rosa María Prieto replies that the invoice number received must be adapted to the format guidelines published on the electronic site, but that, nevertheless, she will consult with the Tax Information Technology Department to see if a solution can be found to these discrepancies.

Mr. Manuel Trillo Álvarez, Central Delegate for Large Taxpayers, then comments that an analysis carried out within the scope of the Central Delegation found that, indeed, almost 99% of the discrepancies arose from formatting issues in the various computer systems.

The Director of the Tax Management Department then asks companies to try to adapt to the guidelines drawn up by the Tax Agency as far as possible, since this will achieve a higher degree of verification, increasing the quality of the information that is subsequently provided to taxpayers and, in addition, avoiding requests.

Next, Ms Rosa María Peña García, representative of Michelin, took the floor to point out that the companies had already indicated that the invoice number could cause these problems and that they had proposed carrying out the comparison using the invoice date and its amount.

Ms. Rosa María Prieto answers that the Tax Agency technicians determined at the time that the only way to establish a unique identification was to use the invoice number, since, although it is not usual, a company could issue more than one invoice for the same client on the same day for the same amount. Finally, he reiterated that the issue will be transferred to the Tax Information Technology Department to see if greater flexibility could be introduced in terms of the recording of the data, since, although it cannot be completely resolved, it would be very useful to improve the degree of contrast.

The Renault representative then asks if there are any plans for the regulatory development of the billing project, to which Mr. Luis Jones replies that at this time no further details are available. He added that members of the Forum will be kept informed of any progress made in this area.

Since there are no further interventions, Ms. Soledad Fernández Doctor gives the floor to the Central Delegate of Large Taxpayers in order to comment on the activity of the Cooperative Relationship working group .

Mr. Manuel Trillo begins his presentation by pointing out that the working group met on October 27 and that the following issues were mainly discussed:

1) Use of Economic Interest Groupings (EIG) as an investment structure: Representatives of the Tax Agency expressed their concern about the abusive use of the AIE which, although the Administration had supported them as a way of promoting certain sectors such as shipping, their use had been proliferating in other areas such as cinema, R&D&I projects, etc. It was added that, as established by the General Directorate of Taxes, its use was legitimate, but that the Tax Agency had been observing situations in which there was abuse, with returns of 60 and 70% of the investment, without assuming excessive risks. The Ministry of Science and Innovation had also expressed its concern that, in relation to R&D&I projects, the recipients of tax benefits were not the researchers. The companies were therefore asked for their opinion on the matter, to which they responded that, while recognising the existence of the problem, the AIE was a figure that they treated with a certain distance and that tackling excessive use was the responsibility of the Tax Agency, firstly identifying the structurers and, secondly, correcting the abuses. They also added that these types of structures are sometimes very useful for promoting certain activities considered necessary, but that, nevertheless, clear rules should be established to prevent their use in activities for which this figure was not created. Finally, it was pointed out that, in order to clarify the matter, the convenience of issuing an administrative criterion on its correct use should be analyzed.

2) Instruments used to avoid international double taxation: At the meeting it was noted that the Administration's objective was to align all the instruments that were available to an entity to avoid double taxation (inspections, APA , MAP , etc.), but in such a way that the different procedures were adequately coordinated, deciding in each case which had preference and which, normally, was the one with a specific resolution period. It was added that the collaboration between the Central Delegation of Large Taxpayers and the National Office of International Taxation was very intense, but that the verification procedures, having a specific deadline for their resolution, normally had priority. It was also noted that the Forum's member entities were subject to ongoing verification procedures, so that overlapping instruments were inevitable, although if, during the course of an inspection, a company stated that it was negotiating a APA , the DCGC attempted to wait for the resolution of this, although taking into account that the time limitation of the inspection procedure could make this impossible. However, it was also noted that many of the issues that were typically addressed during the audit were also addressed in the APA , which highlighted the link between the various instruments. For their part, the entities demanded greater speed in the resolution of the APA , to which the representatives of the Tax Agency replied that what was intended was to avoid double taxation for the taxpayer and, to the extent that this involved reaching agreements with tax authorities in other countries, the task was not easy, since all the documentary burden had to be very well documented. Finally, all participants acknowledged that the cooperative relationship model and transparency reports contributed to streamlining the processing of the various procedures.

3) Voluntary submission of transfer pricing documentation: It was reported that, just as in 2016 the possibility for companies to voluntarily submit the transparency report had been approved within the framework of the Code of Good Tax Practices, the Tax Agency, in view of how useful the analysis of said reports was proving to be, was considering the option for companies to also voluntarily submit documentation on transfer pricing, something that some entities were already doing when submitting their transparency report. The companies, for their part, gave a positive evaluation of the initiative, although they pointed out that the content and deadline for submission would have to be specified, and that it would be desirable to obtain an assessment from the Administration of the documentation provided. Regarding the latter, the representatives of the Central Delegation reiterated what was stated in previous meetings regarding transparency reports and added that, as occurs with the analysis of said reports, early knowledge by the Administration of the activity of companies in relation to transfer prices would allow for shortening the time periods of verification procedures, while at the same time raising queries and regularisations.

4) Report to be submitted to the European Commission in relation to component 27 of the Recovery, Transformation and Resilience Plan: The Director of the Planning and Institutional Relations Service thanked the companies for their contributions and said that the report was still being prepared, but that the members of the Forum would be informed when it was finalised.

5) Evaluation of the cooperative relationship model: It was noted by representatives of the DCGC that this issue had been raised at the previous meeting of the working group, which took place on June 9, 2022, where it had been agreed that companies would study the proposals made by the Tax Agency, but that the issue remained pending. Thus, at the October meeting it was reported that the Tax Agency was well advanced in its work on preparing a valuation proposal and it was agreed that, once approved internally, it would be discussed in the working group, in order to obtain a consensual document that could subsequently be presented to the members of the Forum for approval. It was also stated that the Tax Agency was considering two aspects in preparing the proposal:

• Statistics: Analyzing the evolution of litigation both quantitatively and qualitatively, as well as the use of collaborative instruments, such as transparency reports, APA , ...

• Survey: It would be voluntary and anonymous and would be aimed at both companies and government staff. It would be inspired by the report prepared by the OECD “Tax Morale II”, in which, after identifying a series of challenges around trust and transparency, a series of approaches are established aimed at improving communication and building more effective relationships between tax administrations and taxpayers.

To conclude his speech, Mr. Manuel Trillo pointed out that it would not only be interesting to know the opinion of the members of the Forum on the evolution of the Cooperative Relationship model, but it would also be very useful and would give greater legitimacy to the model if all the companies adhering to the Code of Good Tax Practices were to express themselves on the issue. He added that a meeting of the Cooperative Relations working group will be convened shortly to present the Tax Agency's proposal.

Ms. Soledad Fernández Doctor then states that, in her opinion, after so many years of operation, an evaluation of the current situation should be carried out in order to correct deficiencies and continue to advance in the construction of the model. He then offers the floor to those in attendance in case they wish to make any observations or comments.

Firstly, DD Manuel Alfonso García Rodríguez, representative of La Caixa, took the floor to say that he considers it a very positive proposal to carry out a retrospective analysis and that, in his opinion, after 25 plenary sessions of the Forum, what is needed is to establish a strategic plan for improvements over three years, which would be worked on by the working group and on which reaching an agreement would be a realistic possibility.

Next, Mr. Daniel Gómez-Olano takes the floor and, after stating that he also thinks it is a good idea to carry out a recap of the evolution of the model given the time that has passed, points out that, with regard to what was commented by the Central Delegate in relation to the voluntary submission of transfer pricing documentation, the same thing happens as with transparency reports and that is that, by lacking a feedback issued by the Tax Agency and within a reasonable period, the stimulus is less. He adds that in this matter the Administration always replies that it does not have a legal instrument that allows it to carry out an assessment of the information provided in the transparency reports submitted by companies, but that, however, there are references in comparative law whose good practices could be adapted to our legal system.

Mr. Manuel Trillo replied that he agreed that an attempt must be made to find a mechanism that satisfies the companies submitting the transparency report with regard to the assessment of the information contained therein. However, he points out that there is a certain feedback since, as has been mentioned in previous meetings, from the analysis and discussion of the transparency reports, differences have sometimes arisen that have led to very specific partial regularisations. He also added that, as regards documentation on transfer pricing, the Tax Agency is studying how far it could go to provide feedback .

Mr. Francisco Javier Baulenas then takes the floor to indicate that he wishes to ask two questions. The first is related to what was commented by the Central Delegate in relation to the coincidence in time of a verification procedure and a APA . He added that his entity renewed certain APA before the start of an inspection procedure and that he would like to know whether said APA were still being processed or if it was necessary to wait for the end of the inspection, since the Tax Agency had not sent him any communication.

Mr. Luis Jones responds that the preference between one instrument or another is assessed in each specific case and reiterates that, in any case, the ONFI and the DCGC will apply the same criteria regardless of which is processed first, since for the Tax Agency the result is the same. Thus, it indicates that the Central Delegation will inform SEAT about the decision adopted in the specific case that has been asked about. Finally, in relation to the preference of one instrument over another, the Head of the ONFI points out that at the working group meeting one entity commented that, although the result was the same, for companies there was a different nuance, since presenting a APA to the Board of Directors was not the same as an inspection, even if it ended in compliance.

Mr. Francisco Javier Baulenas intervenes again to point out that, in relation to transparency reports, his entity has been presenting them for several years and in them, as well as during their analysis by the Administration, a lot of documentation on transfer prices is provided and that, therefore, he does not fully see that bringing forward the presentation of said documentation will represent any progress. In addition, returning to the transparency reports, he adds that he understands that a type of valuation certificate cannot be officially issued, but that, nevertheless, it should be noted in the subsequent actions of the Tax Agency. He reiterated that they have been submitting the transparency report for several years, with the contribution of the complementary documentation required by the team that is analysing it, and pointed out that he was somewhat surprised by the start of a general verification procedure whose only argument was that the exercise would not expire. The SEAT representative adds that the quid pro quo that companies submitting the transparency report should obtain, which is studied by a risk analysis team of the DCGC , is an assessment of the information provided, once the inspection has verified that the facts are met.

Mr. Manuel Trillo replied that there are indeed transparency reports that include around 60 or 70% of the documentation relating to transfer pricing, but that this is not the case in all cases. He adds that the intention behind proposing the voluntary provision of such documentation is to standardise it with what would be required during a verification procedure. On the other hand, the Central Delegate points out that now that they have begun to check exercises in which the transparency report was already presented, experience is showing that the Tax Agency knows the essence of the activity, but not the details, that is, that although the transparency report provides information and explanations about the operations, it does not reach the level of detail that is achieved in an inspection procedure. Thus, in conclusion it could be said that the first cannot replace the second, but it helps in its processing. Furthermore, Mr. Manuel Trillo indicates that, if an issue has been satisfactorily explained in the opinion of the team analysing the transparency report, it is normal that, subsequently, in a check, the matter is not questioned.

Mr. Carlos Lázaro, representative of Banco Sabadell, then took the floor to point out that expanding the areas where companies can explain, dialogue and come to an understanding with the Administration on issues that are complex for everyone and, furthermore, that the debate takes place at one time and not at another, that is, in an environment of cooperative relations, can only be valued positively. He also indicates that his entity is aware of the regulatory limitations that our legal system imposes on the Tax Agency in this matter. Finally, he points out that, in his opinion, progress will continue to be made in this model and that new mechanisms will be established to make it effective.

Ms. Soledad Fernández Doctor then indicated that a meeting of the Cooperative Relations working group would be convened as soon as possible, at which the proposal for evaluating the functioning of the Spanish cooperative model prepared by the Tax Agency would be presented.

Since there are no further interventions, the General Director gives the floor to Mr. Luis Jones to comment on the activity during the second half of 2022 of the working group on Analysis of tax regulations and reduction of conflicts .

The Head of the National Office of International Taxation indicates that the working group held a meeting on November 3 and that two issues were basically addressed:

1) New Crypto Asset Reporting Framework (CARF) approved by OECD : The representative of the General Directorate of Taxes commented that the new framework had been requested by the G20, with the aim of increasing transparency in the matter. It was also reported that the development of mechanisms for its effective implementation was pending and that they would be reproduced in the European Union through DAC 8, with their application not planned before 2024. It was also noted that the new reporting obligations would be implemented through the amendment of the Royal Decree regulating the automatic exchange of financial accounts, although the date of approval of the national regulations is not yet known, although it would be closely linked to the transposition of the Directive.

2) Latest conflicts in the application of the standard published: The representative of the Department of Financial and Tax Inspection at the meeting pointed out that in recent years the number of conflicts in application of the standard had increased due, fundamentally, to the numerous cases of VAT that the Courts were drifting towards this path, which had the peculiarity that an advisory Commission had to be established in which, in addition to the acting Tax Administration, the General Directorate of Taxes participated. Thus, conflict number 9 was discussed, relating to the non-deductibility of financial expenses in certain corporate operations, and, specifically, those derived from a loan obtained for the repayment of part of an issue premium.

The Director General then thanks Mr. Luis Jones for his presentation and gives the floor to those present in case they wish to make any comments. Since no interventions were made, the next point on the agenda was moved on.

4. Next call

The Director General stated that the intention was to maintain the semi-annual frequency of the meetings and that the next one would probably be held in June.

5. Other considerations, requests and questions

Next, Ms. Soledad Fernández Doctor opens a round of interventions.

Firstly, Mr. Ignacio Fraisero takes the floor to reiterate what was discussed in previous meetings in relation to the concern generated in the Tax Agency by the advertising of days without VAT , due to the negative impact that these actions have on the tax consciousness of citizens.

Next, Mr. Francisco Javier Baulenas will speak, announcing that as of March or April 2023 he will leave his position as Director of Taxes at SEAT, so this will be the last plenary session he attends. He added that he only wanted to say goodbye and thank all the members of the Forum for their work and contributions, which, personally, have been very enriching and have allowed the Forum to move forward since its creation in 2009, becoming, in reality, a space for communication and dialogue. Finally, he said that his successor was unable to attend the plenary session because he was replacing him at another event, but that he would be officially introduced in the coming months.

The Vice President of the Forum then thanks Mr. Francisco Javier Baulenas on behalf of all those present for his participation over all these years in the different works that have been developed, as well as the collaborative spirit with which he has always made his contributions, even in disagreement.

Ms. Carmen Alonso then points out that, given the absence of the Technical Secretariat Collaborator representing the companies, she wishes to thank Mr. Javier Baulenas on behalf of the Forum for having always been available, permanently contributing with his ideas, very positive and very critical on the aspects to be improved, which has allowed us to continue moving forward. She adds that he always made her job as a Technical Secretariat Collaborator much easier, for which she is very grateful.

Since there were no further requests to speak, the Vice President of the Forum thanked those present for their presence and closed the twenty-fifth plenary session of the Large Business Forum, saying goodbye until the next meeting.