Minutes of the meeting

Large Companies Forum

MINUTES OF THE PLENARY SESSION 1/2021

President of the Forum of Large Companies

President of the State Agency for Tax Administration - Secretary of State for Finance

Mrs. Ines Maria Bardon Rafael

Vice-President of the Large Companies Forum

Director General of the State Agency for Tax Administration

Mr. Jesus Gascon Catalan

Members representing the Tax Agency

Director of the Tax Management Department

Mr. Gonzalo Garcia de Castro

Director of the Department of Financial and Tax Inspection

Mr. Javier Hurtado Puerta

Director of the Department of Aduanas and Excise Duties

Ms. Mª Pilar Jurado Borrego

Central Delegate of Large Taxpayers

Mr. Manuel Trillo Alvarez

Deputy Director General of Tax Technology - Tax Management Department

Mrs. Mercedes Jordán Valdizán

Deputy Director General of Coordination and Management – Collection Department

Mrs. Virginia Muñoz Fernández

Members representing Large Companies

ACS

Director of Tax Advisory

Mr. Alfonso Moreno Garcia

AMADEUS IT GROUP SA

Vice President of the Board of Directors

Mr. Jacinto Esclapés Diaz

BANCO SANTANDER

Group Executive Vice President

Mrs. Carmen Alonso Peña

BBVA

Director of the Tax Department

Mr. Jose Maria Vallejo Chamorro

LA CAIXA

Deputy Director Tax Advisory

Mr. Juan José Lagares Gómez-Abascal

CEPSA

Fiscal Director

Mr. Alberto Martin Moreno

COFARES

Advisory Board of Directors

Mr. Luis Valdeolmos Gonzalez

EL CORTE INGLÉS

Assistant Manager - Tax Department

Mr. Jose Roberto Barroso Duke

ENDESA

Head of Tax Affairs

Mrs. Maria Muñoz Viejo

FCC

Director of the Tax Department

Mr. Daniel Gómez-Olano González

IBERDROLA

Global Director of Tax

Mrs. Begoña Garcia-Rozado Gonzalez

IBERIA

Spanish Tax Lead

Mrs. Cristina Santana Negrin

INDITEX

Director of Tax Advisory

Mr. Andres Sanchez Iglesias

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

Mr. Jose Antonio Gibello Saiz

RENAULT

Tax specialist

Ms. Alejandra Force Jara

Tax specialist

Mrs. Almudena Fernández Miguélez

REPSOL

Director General of Economic and Fiscal Affairs

Luis Lopez-Tello and Diaz Aguado

SEAT

Fiscal Manager

Ms. Marta Camprubí Rabinad

SIEMENS

Director of Taxes

Mrs. Ana Maria Moreda Galante

TELEFÓNICA

Fiscal Director

Mr. Angel Martin Gomez

VODAFONE

Tax Advice Director

Mr. Javier Viloria Gutierrez

Technical Secretariat of the Large Companies Forum

Technical secretary

Mrs. Rosa Maria Prieto del Rey

On June 29, 2021, the twenty-second plenary session of the Large Companies Forum will be held by videoconference, with the following people attending, and in accordance with the following:

AGENDA

1. Opening of the session.
2. Approval of the minutes of the meeting held on November 17, 2020.
3. Change of the Technical Secretariat collaborator.
4. Planning and accountability of the Tax Agency.
5. Summary of the different working groups of the Forum.
6. Group of experts for tax reform.
7. New Headquarters of the Tax Agency.
8. Next call.
9. Other considerations, requests and questions.

1. Session opening

The session was opened by Ms. Inés María Bardón Rafael, President of the State Agency for Tax Administration (Tax Agency) and Secretary of State for Finance, in her capacity as President of the Large Business Forum, who, after greeting the attendees and thanking them for their presence, highlighted the role of the Forum as a tool for cooperation. He adds that it is therefore important to maintain the regular frequency of the sessions and continue to address issues of great interest to all participants. He also noted that if the health crisis evolves as expected, it is possible that the next meeting could be held in person.

2. Approval of the minutes of the meeting held on November 17, 2020

Ms. Inés María Bardón gives the floor to Ms. Rosa María Prieto del Rey, Director of the Planning and Institutional Relations Service and Technical Secretary of the Forum, who points out that the minutes of the 21st session of the Plenary Session of the Forum of Large Companies were sent to its members and adds that, since no observations have been received and if there were none at this time, it would be definitively approved. As no observations were made by those present, the minutes of the plenary session of November 17, 2020 are declared definitively approved.

3. Change of the Technical Secretariat collaborator

The President of the Forum gives way to the next point on the agenda and again gives the floor to Ms. Rosa María Prieto.

The Director of the Planning and Institutional Relations Service began her speech by reminding those present that Ms. Carmen Alonso Peña, representative of Banco de Santander, has been working as a collaborator of the Technical Secretariat since 2015 and highlighted the dedication and effort with which she has carried out the coordination tasks, which have required many hours of intense work. He added that he was grateful to Ms. Carmen Alonso for the work she had done and indicated that it was more than reasonable that there be a replacement. Ms. Rosa María Prieto proposes that, if there are no objections from those attending, the role of collaborator representing the companies in the Technical Secretariat should begin to be performed by Ms. Begoña García-Rozado González, representative of Iberdrola. Since there are no objections, the proposal is approved. He added that he reiterated his gratitude to Ms. Carmen Alonso and welcomed Ms. Begoña García-Rozado to her post.

Next, Ms. Carmen Alonso took the floor and thanked those present for the support they have given her over the years in the development of her duties as a collaborator of the Technical Secretariat. He added that his aim has always been to ensure that the Forum remains an effective framework for cooperation, even in the exceptional situation experienced in recent times due to the health pandemic, during which he has continued to promote the holding of meetings of working groups and plenary sessions. Finally, she notes that she will continue to participate in the Forum as a representative of Banco Santander and offers Ms. Begoña García Rozado her support and collaboration in the performance of her new duties.

Ms. Begoña García-Rozado then declares that she is available to all Forum participants.

To conclude this point on the agenda, the President of the Forum thanks both of them for their dedication and availability.

4. Planning and accountability of the Tax Agency

Ms. Inés Bardón moved on to the next item on the agenda and indicated that the Director General of the Tax Agency would be in charge of its development. He added that at this point important issues will be shared in relation to the Strategic Plan and transparency.

Mr. Jesús Gascón begins his presentation by commenting that he will support his intervention with a presentation in power point sobre los instrumentos de la Agencia Tributaria en planificación y rendición de cuentas. Añade que la Agencia Tributaria está haciendo un esfuerzo en transparencia publicando, tanto en la web de la organización como en el portal de la transparencia, su planificación y resultados. Así, indica que en este punto del orden del día va a realizar un resumen de los aspectos más destacados de los siguientes documentos: el Plan estratégico de la Agencia Tributaria y su adenda, las directrices generales del Plan Anual de Control Tributario y Aduanero de 2021 que fueron publicadas en el BOE del pasado 1 de febrero, el Plan de objetivos 2021, el Componente 27 del Plan de Recuperación, Transformación y Resiliencia relativo a la prevención y lucha contra el fraude fiscal, la evaluación TADAT, promoted by the International Monetary Fund (IMF), to which the Tax Agency has submitted and which allows to know the degree of alignment of an Administration in relation to the considered best international practices, and, finally, the reports prepared by the Internal Audit Service (SAI) referring, respectively, to the evolution of the multiannual indicators of the Strategic Plan and the degree of compliance with the objectives in 2020. Below, Mr. Jesús Gascón briefly develops the aforementioned issues:

1. Strategic Plan of the Tax Agency 2020-2023 and addendum: Mr. Jesús Gascón points out that the Strategic Plan is in force for the period 2020-2023, but that, although 2020 cannot be considered a "normal" year for well-known reasons, when an organization has a strategic plan, however catastrophic the circumstances, the consistent thing is to maintain multi-annual planning, adjusting it to the circumstances of each moment. Thus, the Tax Agency has approved an addendum to the Strategic Plan for 2021, from which the following issues can be highlighted:

   • In the area of economic management, the aim is to standardise the contracting procedures of the Tax Agency, as well as to analyse its current financing system, which has certain peculiarities that differentiate it from other bodies of the Administration, since the initial budget is increased with credit generations due to the participation of the Tax Agency in the collection of liquidation acts and collection management.

   • As regards technical assistance to other organisations, it is worth highlighting the efforts being made by the Tax Agency, not only with human resources, in the implementation of the new IT management model of the General Directorate of Taxes and the economic-administrative courts, developing a joint strategy with which it is intended to integrate the information systems of the three organisations into the same technological infrastructures, maintained and developed by the Tax Information Technology Department.

   • In terms of information and assistance, a new system is being developed to correct errors made in self-assessments submitted in order to speed up the management of corrections, since, currently, for legal and practical reasons, they are processed in a way more similar to that of appeals than to that of declarations, when in reality most of the corrections are second or subsequent declarations that modify the one initially submitted. On the other hand, in the Collection area, telephone services are being reinforced, as well as those provided through the app of the Tax Agency, so that the taxpayer can pay their debts, request deferrals and installments, etc. with a single click.

   • In the area of preventive actions, several initiatives are being worked on, such as:

     • The implementation of a system for predicting errors in the preparation of IRPF declarations through a system of warnings aimed at making the taxpayer reconsider a certain action that he is carrying out and not make an error that could subsequently give rise to an audit action. This is a new experience and it is too early to draw a conclusion, but it is hoped that the result will be positive and that errors made inadvertently by taxpayers will be minimized.

     • Work is underway to develop analytical tools that will enable the systematic use of information from the Single Notarial Index (IUN).

     • Strengthening the cooperative relationship by launching and consolidating a consultation channel for associations and colleges of tax professionals adhering to the Code of Good Practices.

     • Adaptation work is being carried out for the implementation of the new tax figures (Tax on Financial Transactions and Tax on Certain Digital Services).

   • Regarding actions in the area of control of tax and customs fraud, the following stand out:

     • In the area of Inspection, virtual visits (VIVI) are already a real alternative and, at this time, 6,000 procedures have been formalized, which implies that this system, although voluntary for those involved, is having significant use. The plan is to extend this instrument to other areas of action of the Tax Agency. A feedback system is also being implemented in relation to the information obtained on the reasons for regularisation of inspection actions in order to assess the adequacy of the regularisation carried out with the reasons for selecting the taxpayers to be inspected. On the other hand, the Tax Agency is promoting the implementation of effective technological solutions to combat tax fraud caused by the use of dual-use software.

     • In terms of electronic commerce, tax management and control strategies are being reconsidered in order to ensure a balanced treatment of activities carried out through e-commerce in relation to those that are carried out in a conventional manner. These measures have major implications in the field of customs and VAT .

     • Progress is being made on the strategic line of nationalisation of tax and customs control in order to increase the efficiency of control actions, such as, for example, certain powers in customs clearance.

2. General guidelines of the Annual Tax and Customs Control Plan for 2021: The Director General of the Tax Agency comments that, given that they are well known to all those present, he will only reiterate that they were published in the BOE on February 1.

3. 2021 Goal Plan: Mr. Jesús Gascón points out that its purpose is to numerically represent all the actions planned by the Tax Agency and that, given their plurality, it is necessary to use different magnitudes for their measurement (number of actions, percentages, days, etc.). He added that it is structured in three blocks, which include actions to assist taxpayers, those to prevent tax and customs fraud, and those for control. The report also notes that the objectives include monitoring the evolution of gross and net tax revenues, given that, at the tax level, this is the main indicator for monitoring the application of the tax system. The Director General reiterates that, in the first block, taxpayer assistance, various magnitudes are used to measure the indicators, given their diversity. He adds that the use of virtual assistants is measured in number, the processing time for appeals is measured in days, and the average waiting time for using telephone services is measured in seconds. As regards the second block, actions to prevent tax and customs fraud, it is noted that improvements are planned in the quality of census information. Likewise, it highlights that a very significant indicator is the quality of the international information provided to the Spanish Tax Administration by countries of both the European Union and the OECD environment. He adds that sometimes the data cannot be incorporated into the Tax Agency's information systems, requiring some processing. The aim is to ensure that 85% of the data is directly actionable and usable in both information campaigns and risk analyses. On the other hand, also within the second block of actions, the number of actions to be carried out in the area of customs and excise taxes is measured. Finally, and in relation to the third block, tax and customs fraud control actions planned for 2021, Mr. Jesús Gascón highlights the following:

   • In the area of internal tax control, the actions are differentiated according to their type (verification, investigation, etc.), as well as depending on the body that is going to carry them out (bodies of the Tax Management Department, of the Large Business Management Units, etc.), which causes the disparity in the number of them, since some correspond to extensive controls and others to selective controls.

   • Section 4 contains the different types of customs control actions, special and environmental taxes.

   • In the area of collection, a distinction is made between collection control actions and collection investigation actions, with actions of a selective nature being reflected in section 5 of the Objectives Plan, hence the number is not very high.

   • Section 6, referring to debt collection management, includes the amounts managed by the Tax Agency during the year, as well as the expected income derived from the selective collection actions included in section 5.

   To conclude this matter, Mr. Jesús Gascón indicates that, in order not to extend his intervention, he will not refer to tax revenues since they are monitored in the monthly reports published by the Tax Agency.

4. Component 27 of the Recovery, Transformation and Resilience Plan on the prevention and fight against tax fraud: The Director General points out that he will refer to component 27 of the Plan because it is the one most directly related to the activity of the Tax Agency, although it is not the only one, since component 28 refers to the reform of the tax system and its application. He added that of the measures contained in component 27, which have been communicated to the European Commission, he would like to highlight the following:

   • Approval of the draft law on measures to prevent and combat tax fraud.

   • Modernization of the Tax Agency: The main lines of action are increasing its workforce, investing in adapting the organization to the digital environment and adopting a decisive strategy to address the black economy and the tax gap.

   • Strengthening taxpayer assistance services: It is one of the main axes of the Strategic Plan 2020-2023 and the Tax Agency is expected to carry out the following initiatives:

     • Implementation of Comprehensive Digital Assistance Administrations (ADI) aimed at providing information and assistance services by electronic means using non-face-to-face channels. The Tax Agency has already started this experiment and, although it is too early to assess the situation, everything indicates that this initiative is having considerable success.

     • Progress in making available to taxpayers drafts of IRPF and IS declarations, as well as improving the tax data provided to them.

     • Completion of the assistance service for the preparation of form 303.

     • Improve the import of data recorded in the registration books, for the purposes of IRPF .

   • Promoting a cooperative relationship model with taxpayers, as well as assisting judges and courts in the fight against tax fraud. Thus, in relation to the cooperative relationship model, the Tax Agency has provided the European Commission with the number of transparency reports submitted by large companies as an indicator for monitoring this initiative.

   • At the international level, and given the importance of administrative cooperation for tax purposes, progress will be made in developing a systematic use of information obtained through the use of bilateral and multilateral cooperation instruments.

5. Assessment TADAT , promoted by the International Monetary Fund (IMF): The Director General points out that this analysis is intended to compare the degree of alignment of the Tax Agency's actions in relation to international best practices. He adds that the following can be concluded from this:

   • In most of the areas evaluated, a clear harmony with the rest of the countries can be seen, such as information and assistance to taxpayers, management model by objectives articulated from planning instruments, effective risk management, control actions, etc.

   • There are areas in which, based on the grades obtained, it is clear that it is necessary to reflect and work to overcome weaknesses in some aspects of the same. Examples include:

     • Compliance gap analysis is only carried out for VAT within the European Union and is not carried out for direct taxes;

     • the resolution of a percentage of the appeals exceeds the reference time;

     • There is a certain delay in refunds of VAT , although those corresponding to SII and REDEME have been expedited ##3##;

     • There is a certain delay in the publication of plans and programmes, although in this area the deficiencies are being corrected with the transparency efforts that are being made.

     However, Mr Jesús Gascón points out that not agreeing in some aspect with international practices does not always mean that something is being done wrong; Sometimes, a different path has simply been chosen. An example would be the fact that tax payments are recorded on a biweekly basis, while in other countries they occur immediately. He added that in our country this indicator goes beyond the activity of the Tax Agency and is more closely related to the financial system.

6. Reports prepared by the Internal Audit Service (SAI) in compliance with Law 19/2013, of December 9, on transparency, access to public information and good governance, referring to the evolution of the multiannual indicators of the Strategic Plan and the degree of compliance with the objectives in 2020, respectively: Mr. Jesús Gascón points out that, first of all, he wishes to reiterate that 2020 has been an atypical year and that the activity of the Tax Agency has been greatly conditioned by the pandemic. On the other hand, it points out that, in relation to the first report of the Internal Audit Service, in order to carry out a homogeneous and consistent analysis over time, the results motivated by extraordinary circumstances have not been taken into account, such as, for example, the interest paid as a consequence of the declaration of unconstitutionality of Royal Decree Law 2/2016, of September 30, which introduces tax measures aimed at reducing the public deficit, in relation to the fractional payment of Corporate Tax. He therefore indicates that he wishes to highlight the following issues in the report:

   • Evolution of voluntary compliance: Mr. Jesús Gascón indicates that, comparing the evolution of the aggregate tax bases of the different taxes with that of nominal internal demand, once the impact of other factors such as regulatory changes or the transitory impacts of judicial rulings has been eliminated, it can be said that, although there has been a 7.9% drop in the aggregate tax bases compared to the previous year, this is lower than that of GDP and that of internal demand. Thus, it can be concluded that the behaviour of voluntary compliance over the last 5 years has been positive, since in 2020 the tax bases have experienced a smaller drop than that suffered by the economy.

   • Effects induced on voluntary compliance by the actions of the Tax Agency: With the exception of companies and groups affiliated with the Central Delegation for Large Taxpayers (where there is a great variability in results between years due to internationalisation and business restructuring that makes it difficult to make homogeneous comparisons between years), it has been observed that taxpayers inspected in the years 2014, 2015, 2016 and 2017 increased their income by between 25% and 30%, while the average growth for all taxpayers is between 11% and 17%. D. Jesús Gascón adds that this type of analysis is highly complex, but the objective is to extend the measurement of induced effects to other areas of action. Thus, it points out that the improvement induced in voluntary compliance affects the results of control actions, a magnitude that has traditionally been used to measure the performance of the Tax Agency, which makes it necessary to look for new ways to illustrate the effort that is being made in terms of prevention and its impact on the rest of the actions. Furthermore, it indicates that, taking into account that the organization's strategy is to improve voluntary compliance, it has decided to exclude extraordinary results from the calculation, and not just the extraordinary part of them, leaving them at the average, which quantitatively translates into the fact that the regularizations carried out by the Tax Agency have amounted to around 8,000 million euros.

   • Improve efficiency: Mr. Jesús Gascón points out that efficiency is calculated by dividing, for a specific year, the budgetary cost of the Tax Agency by the taxes it manages. He adds that the benchmark organisations operate within a ratio of between 0.7 and 0.8 euros for every 100 euros managed. For its part, the Tax Agency in 2019 obtained a ratio of 0.67%, while in 2020, although the budgetary cost has remained stable, due to the considerable drop in tax revenues as a result of the pandemic, the objective of not exceeding 0.7% has not been achieved, having stood at 0.77%. On the other hand, the Director General comments that the same has occurred in the rest of the countries and that, given the exceptional nature of the 2020 financial year, it is expected that, in 2021, with the increase in tax revenues, this indicator will again be below 0.7%.

   • Manageable debt: Mr. Jesús Gascón points out that, although the target was to reach 80% of the net manageable debt in executive (around 30 billion euros), good results have finally been achieved and 90% has been managed (around 27.5 billion euros). He adds that, in order to carry out a correct analysis of this indicator, it must be taken into account that of the total outstanding debt (around 42 billion euros), just under 5 billion are suspended due to bankruptcy proceedings and 12 billion are suspended due to appeal or claim. As for the evolution of bankruptcy proceedings, the number has been decreasing since 2014 but, due to the economic crisis caused by the pandemic, an upturn is expected in 2021. On the other hand, the amounts suspended due to appeal or claim show that this indicator is closely related to two others: tax disputes and interest payments.

   • Tax conflict: The Director General points out that in 2020 there has been a reduction of 600 million in the debt suspended due to appeal or claim, which in principle is a good figure, although we will have to wait until 2021 to see if the trend is consolidated. He adds that, of the 12 billion euros, approximately half correspond to verification actions by the Central Delegation of Large Taxpayers and, in addition, 40% of these 6 billion euros of debt have been suspended for more than 5 years, which denotes a problem in the time taken to resolve economic-administrative claims and contentious-administrative appeals, despite the effort being made to support the economic-administrative courts. On the other hand, Mr. Jesús Gascón indicates that the relative conflict, in terms of the number of appeals or REA filed, is 1.72% and considering only the latter the percentage is 0.7, which, in turn, in absolute terms translates into 132,000 REA filed in 2020, the lowest figure in many years, although given that there has been a sharp drop in the settlements made, it is logical that claims also decrease. In this sense, it can be stated that in 2020 the conflict has decreased in absolute terms and remains stable in relative terms. On the other hand, it points out that this indicator includes acts annulled as a result of the total or partial estimation of the appellants' claims, including those based on formal criteria. Thus, taking into account that litigation is very low in some areas, such as census or tax collection, the percentage of annulments of acts issued by tax management bodies is 1.29%, while that of those issued by inspection bodies is 4.48%, reaching 18.90% in the case of non-compliance reports. He adds that these data show that, to the extent that the percentage of non-compliance reports as a way of ending inspection procedures remains low, conflict will also decrease. To conclude this point, the Director General points out that, although the courts' estimates are not generalized, the causes of challenge and the reasons for total or partial estimation deserve analysis and study by the Tax Agency in order to improve the quality and motivation of the administrative acts issued and thus reduce conflict.

   • Reduction of interest paid: Mr. Jesús Gascón points out that the Tax Agency pays late payment interest for various reasons, such as, for example, the return of undue income, although the majority respond to the cancellation of administrative acts and delays in the processing of refunds. He adds that the evolution since 2014 of the interest paid, without considering those paid as a result of extraordinary circumstances that would distort the comparison, such as the aforementioned declaration of unconstitutionality of Royal Decree-Law 2/2016 that affected the fractional payments of Corporate Tax, shows a downward curve, despite the fact that refund requests have been increasing year after year. Thus, it points out that in 2020 the evolution of this indicator has been consistent with the objective set in the Plan and has maintained the reduction of recent years.

   Mr. Jesús Gascón then points out, in relation to the Internal Audit Service report on compliance with the objectives in 2020, that the first thing explained therein is how atypical this year has been and that, evidently, this circumstance has been reflected in the ordinary activity of the Tax Agency. As an example, he adds that operational restrictions caused the number of notifications issued by the Tax Agency to fall by 43.6% as of 1 June 2020 compared to the same period of the previous year, although, with the progressive resumption of actions and the return to notifying, at the end of the year the drop was 9.5%, a drop that in homogeneous terms can be placed at 5%, given that in 2019 a considerable number of notifications were issued as a result of the exemption from maternity benefits. Furthermore, given the uncertainty caused by the pandemic, the Tax Agency's Directorate decided to significantly reduce the benchmarks to be met in most of the indicators of the Objectives Plan compared to those initially planned and, once ordinary activity was recovered, it was decided to maintain the established indicators without updating them again, since the unknowns were still considerable and, in addition, it was considered preferable to gradually recover the work pace without forcing the normal operation of the offices in a situation still far from normal. Thus, it indicates that the following issues will be highlighted from the SAI report:

   • In terms of the number of procedures, the year-on-year drop was 4.7%, although it was not homogeneous, varying according to the type of procedure.

   • The number of actions in the extensive control procedures carried out by the tax management bodies began to recover from June onwards and there was a slight increase of 0.9% compared to the previous year, although unevenly, since the control of economic activities was reduced by 2.4%.

   • The number of inspections registered a 5.7% drop compared to 2019 due to the suspension of the deadlines for the procedures for several months, since, once they were resumed, the Tax Agency considered it preferable that during the second half of the year the actions continued following their usual dynamics.

   • In the area of customs and excise duties, the drop was 8% due to the significant decrease in imports and exports, with the consequent impact on the number of control actions carried out.

   • In the area of tax collection, the year-on-year drop was 11% due to the weight in this indicator of selective control actions through personal inspection, which, for health reasons, were drastically reduced in 2020.

   • As for virtual assistants, VAT has become hegemonic to the detriment of other services on line .

   • Telephone assistance, measured by the percentage of calls answered, has achieved a compliance rate of 74.74% due to the increase in demand caused by the closure of the offices, which at first could not be attended to, although the situation gradually returned to normal and the year ended with good results.

   • As regards the streamlining of management, the average time taken to resolve appeals has been below the expected results, as reflected in the self-assessment. TADAT . Mr. Jesús Gascón adds that in 2021, priority will be given to actions that promote compliance with this indicator.

   • As regards the census indicators and those of preventive and control actions in the customs field, all exceeded 100%.

   • In terms of internal tax control actions, 100% has also been exceeded in all indicators, except for judicial assistance due to a lower demand by judicial bodies for this type of collaborative actions due to the pandemic situation.

   • In terms of results, the percentage of compliance with tax revenue forecasts reached 98% due to the negative impact of the pandemic on the economy and its reflection in tax revenues.

To conclude his presentation, Mr. Jesús Gascón reiterated that the Tax Agency is making an effort to be transparent and that the documents he has referred to have been published on the transparency portal and on the Tax Agency's website, and sent to Parliament.

Ms. Inés Bardón then thanked the Director General for his intervention and added that, in her opinion, the Tax Agency is doing an excellent job in terms of transparency, not only by publishing its results, but also by submitting to such demanding mechanisms as self-assessment. TADAT , in order to identify critical points where improvement is needed. On the other hand, he points out that increasing the transparency of organisations is a general demand of citizens and that, in this sense, and given that this Forum is based on cooperation, it would be desirable for companies to also undertake this exercise of transparency and share perspectives and lines of action in this area.

The Secretary of State then offers the floor to those present and, as no one speaks, moves on to the next point on the agenda.

5. Summary of the different working groups of the Forum

The Director General of the Tax Agency indicates that the Forum's working groups have continued with their usual activity and each of them has held two meetings during the first half of 2021.

He then gives the floor to Mr. Gonzalo García de Castro, Director of the Tax Management Department, so that he can comment on the main topics that were addressed in the working group for the Analysis and rationalization of indirect tax burdens .

Mr. Gonzalo García de Castro points out that the following issues were discussed at the meetings of the working group:

• The status of development of the strategies for the implementation and application of the Tax on Financial Transactions and on Certain Digital Services, as well as their models (604 and 490, respectively).

• The new models 234, 235 and 236 linked to the DAC 6.

• Regarding the 2020 Corporate Tax campaign, improvements were highlighted in relation to the tax data made available to taxpayers, as well as the inclusion of the possibility of transferring it to the declaration. It was also pointed out that in a modern tax administration it was necessary to modify the strategies for controlling the application of taxes, transforming traditional a posteriori tax controls into a priori preventive controls, through the development and promotion of taxpayer assistance services in the preparation of their declarations, so as to minimise discrepancies.

• Regarding the VAT help services, it was noted that with Pre303 practically all large companies had their aggregated record books and a pre-calculation of self-assessment, based on the information provided through of SII . In addition, it was indicated that the possibility of accessing the corresponding boxes of form 036 or 037 from the self-assessment itself had been incorporated in case any modifications were needed to the census data.

Finally, the Director of the Tax Management Department comments that it is expected that on July 1 the locator for deliveries of goods and provision of services adapted to the regulatory modifications of VAT on cross-border e-commerce activities between companies and end consumers. Likewise, he asks those present to use and inform the Tax Agency of any incidents that may be detected, since, between the Union regime, the external regime and the import regime, the situation in the field of VAT is tremendously complex. On the other hand, he reminds those present that they have other virtual tools available, such as the apportionment calculator, the calculator of differentiated sectors, the locator of deliveries of goods and the provision of "traditional" services, etc., and all integrated into a system that makes it possible to obtain written responses, which results in greater legal security.

Next, Ms. Mercedes Jordán Valdizán, Deputy Director General of Tax Technology at the Tax Management Department, took the floor to emphasize, with regard to the Corporate Tax campaign that begins on July 1, that this year the amount of tax data offered to taxpayers has increased and that the information requested regarding the breakdown of adjustments to the accounting result, the provision of which is already mandatory in this year, is of particular importance. In this regard, he reiterated that the Tax Agency is available to those attending to clarify any doubts and commented that, in fact, some companies have already been provided with solutions to the problems they have been reporting. On the other hand, regarding VAT , he comments that starting in July the portfolio service for offsetting quotas will be available, the implementation of which has been very costly, since it will have a validation system to avoid errors so that both monthly and quarterly statements are consistent in this section with those of previous years.

Next, Mr. Jesús Gascón thanks Mr. Gonzalo García de Castro and Ms. Mercedes Jordán for their interventions and gives the floor to Mr. Javier Hurtado Puerta, Director of the Department of Financial and Tax Inspection, in order for him to comment on the activity of the working group on Analysis of tax regulations and reduction of conflicts .

Mr. Javier Hurtado begins his presentation by commenting that during the first semester two meetings of the working group were held, specifically on March 18 and May 25, and that both were held in a very fruitful atmosphere where all attendees were able to openly share their points of view on the issues discussed, which, in his opinion, is very enriching for all parties. He added that representatives of the General Directorate of Taxes participated in both sessions and that the following issues were discussed, among others:

• In relation to the information notes that the Tax Agency publishes on its website in order to give general publicity to the Administration's criteria on certain matters, the following were commented on:

  • Note on full regularization in the case of VAT : includes the current jurisprudence in order that administrative verifications must aim at the complete regularization of the tax situation and not only at the vision of one of the taxpayers affected by an inappropriate repercussion of VAT . Thus, it is clarified how the refund of undue income should be calculated and how it should be applied in favor of the taxpayer who has unduly borne that amount without having the obligation to do so, nor the right to the deduction, provided that said amount has been paid into the Public Treasury by its supplier.

  • Note on various issues relating to the scope of arm's length transfer pricing: Clarifies how the inspection bodies should carry out verification of value ranges, so that companies can be familiar with the working technique; That is, given the impossibility of determining in a note of this nature what the value applicable to each case is, the same includes the procedure to follow for determining the transfer price, so that it can be assumed by the tax administration.

• In terms of jurisprudence, the following issues were addressed:

  • In relation to discounts for vehicle financing, the resolution of the Central Economic Administrative Court, of October 21, 2020, concludes that the discount, to the extent that it is paid to the car seller by a third party, is part of the price and It is part of the tax base of VAT .

  • Regarding the transfer of vehicles to employees for their private use, the ruling of the Court of Justice of the European Union, of January 20, 2021 (case C-288/19), analyzes the rule of location of the taxable event and establishes that If a company has deducted VAT from the vehicles that it subsequently passes on to its employees, it gives rise to a self-recharge of VAT in terms of self-consumption or, in the event that a definitive transfer occurs, gives rise to a reverse impact of VAT .

  • Regarding the deductibility of late payment interest in Corporate Tax, the Supreme Court ruling of 8 February 2021 has considered that it is not contrary to the legal system as it is not included in letter f) of article 15 of the Tax Law. At the meeting it was pointed out that the Tax Agency, which had been following a different approach, was already applying the ruling, even going so far as to acquiesce in those cases where the regularisation dealt exclusively with this matter. On the other hand, the companies raised the question at the meeting whether this ruling could be extended to the existing litigation in relation to the deductibility of the directors' remuneration; The representative of the Department of Financial and Tax Inspection replied that it was not extrapolable. It was also commented that this ruling presented an apparent contradiction with the Supreme Court ruling of December 3, 2020, which declared that the late payment interest paid by the Administration was not subject to taxation in the IRPF given its compensatory nature.

  • Regarding the ruling of the National Court of December 11, 2020 regarding the exercise of tax options and offsetting of negative tax bases (BIN), it establishes that the option to offset negative bases can be exercised in the course of a self-assessment rectification. It was clarified by the representative of the Department of Financial and Tax Inspection that this ruling had been the subject of an appeal by the Administration, considering it contrary to the resolution of the TEAC .

Finally, Mr. Javier Hurtado pointed out that the following matters were also discussed during the meetings:

• The representative of the General Directorate of Taxes commented that interpretive resolutions were being prepared regarding taxable events and the method of liquidating the Tax on Financial Transactions and the Tax on Certain Digital Services. The Director of the Department of Financial and Tax Inspection adds that these notes have already been published and that they contribute to clarifying a series of doubts that had been raised in the application of these taxes.

• It was noted that the report of the Advisory Committee on the conflict in the application of the rule (conflict number 2) in relation to the non-deductibility of losses derived from the capital increase of a subsidiary had been published on the Tax Agency's website.

Mr. Jesús Gascón thanks the Director of the Department of Financial and Tax Inspection for his intervention and gives the floor to Ms. Pilar Jurado Borrego, Director of the Department of Customs and Excise Taxes, who will comment on the matters discussed in the meetings of the Excise Taxes working group .

Ms. Pilar Jurado comments that the following regulatory changes were addressed at the meetings of the working groups, among others:

• Directive 2020/262: It was stated that, as a result of this Directive, which will replace the current Directive 2008/18, the European Commission should establish common maximum thresholds for authorised losses in transport, that is, those that may occur without the need for justification in intra-Community movements of goods subject to excise duty. It was also pointed out at the meeting that the situation between countries was very different, as some had planned a percentage of deduction, as in the case of Spain, and others did not. It added that the Tax Agency was analysing whether its regulations were in line with the new Directive. Furthermore, it was noted that the Commission should adopt delegated acts establishing common loss rates for the whole of the European Union and that, until such delegated acts were adopted, the Tax Agency would continue to apply the current legislation. Finally, it was noted that work was well advanced in relation to alcoholic beverages and tobacco products, although the issue of hydrocarbons was proving more complicated.

• Tax on non-reusable plastic packaging: the representative of the Customs Department and II. EE. made a presentation on the foreseeable configuration of the tax in accordance with the provisions of the Preliminary Draft Law on Waste and Contaminated Soils and, in particular, on its objective scope, the taxable event, the tax benefits, the obligations of taxpayers and the possible date of entry into force (early 2022). For their part, the companies expressed their concern regarding the management of the tax, to which the representative of the Tax Agency replied that work was being done on preparing an order to regulate the accounting and census aspects, as well as the self-assessment model and refund request. In addition, representatives of two companies, importers and intra-community purchasers of products subject to the tax, commented on some doubts regarding the interpretation of the Law, especially with regard to the certification of non-recycled plastic, since a different treatment is foreseen for plastic certified as recycled, which will not be taxed. Finally, the companies requested the creation of a working subgroup on this matter, to which the representative of the Customs Department and II. EE. replied that his Department had no problem meeting with companies that wished to express their doubts and problems with this new tax figure, without prejudice to the decision to create the subgroup.

• Amendments to the Excise Tax Law and Regulations:

  • Bill on measures to prevent and combat tax fraud: It provides that, in relation to the holders of tax warehouses that obtain the corresponding authorization that enables them as such, it is necessary that effective storage operations of products subject to manufacturing tax are carried out in said establishments, that is, it must be proven that the capacity of the tax warehouse corresponds to the product that is introduced at each moment. Thus, a new case of serious infringement is classified in the event that the counts carried out by the Administration reveal the existence of differences in raw materials, products in the process of manufacture or finished products in factories or tax warehouses that exceed the percentages authorized by regulations. Furthermore, in accordance with the Supreme Court ruling of 27 February 2018, two other cases of infringement are established: Specifically, a serious infringement is included in cases where the use or purpose given to the products for which an exemption or reduced rate has been applied is not justified, and a minor infringement is also included in cases where the formal requirements have not been met, but the products have been used for a purpose that justifies the exemption or application of the reduced rate.

  • Draft law to amend the Excise Tax Act and draft law to amend its Regulations: Its objective is to transpose the following directives into domestic law:

    • Council Directive (EU) 2020/262 of December 19, 2019 establishing the general regime of excise taxes.

    • Council Directive (EU) 2020/1151 of 29 July 2020 amending Directive 92/83/EEC on the harmonization of excise duty structures on alcohol and alcoholic beverages; and

    • Council Directive (EU) 2019/2235 of 16 December 2019 amending Directive 2006/112/EC, relating to the common system of value added tax, and Directive 2008/118/EC, relating to the general regime of excise taxes, with regard to the defense effort within the framework of the Union.

    Thus, the following aspects were highlighted in the preliminary draft:

    • The movements within the European Union of products subject to excise duty released for consumption that are to be delivered for commercial purposes (guaranteed shipments) are computerised and two new figures are created: the certified sender and the certified recipient.

    • The need to align the treatment for the purposes of II is noted. EE. and VAT of the defense efforts carried out within the framework of the European Union with those carried out under the protection of the North Atlantic Treaty Organization (NATO).

    • Coordination of customs and excise procedures is introduced as a result of adaptation to the Community Customs Code, in particular with regard to export movements in customs situations, which must also be finalised from the perspective of excise duties.

    • A case of joint liability for payment of the tax is established for those who possess, either for wholesale or retail distribution, or for use as fuel in vehicles intended for the transport of goods or passengers, hydrocarbons in which the presence of other products unrelated to them is detected, except for duly authorized additives or markers.

    • New assumptions of infringement are included for cases of non-compliance, delays or provision of false or inaccurate data in SIANE and SILICIE .

    Furthermore, Ms. Pilar Jurado points out that, in relation to the modification of the Regulations on Special Taxes, the meeting highlighted the extension of the current computerized system ( EMCS ) to the circulation of products under a guaranteed shipping regime.

    Next, to conclude her intervention, the Director of the Customs Department and II. EE. added that a company proposed as a regulatory modification the improvement in the fulfillment of the formal obligations of the introduction of bioethanol in refineries and expressed its disagreement with the proposal included in the Preliminary Draft of the modification of the Law on Special Taxes in relation to the limitation of the non-subjecting of consumption in refineries to the Tax on Hydrocarbons to those intended exclusively for use as fuel.

Mr. Jesús Gascón thanks Ms. Pilar Jurado for her intervention and gives the floor to Mr. Manuel Trillo Álvarez, Central Delegate of Large Taxpayers, in order to comment on the activity of the Cooperative Relations working group .

The Central Delegate began his speech by pointing out that he would first like to thank Ms. Carmen Alonso for her fruitful and loyal collaboration, even in disagreement, with which she has carried out her tasks as a collaborator of the Technical Secretariat of the Forum. He also said that he is sure that with the new partner, the cooperation will continue to develop smoothly.

Mr. Manuel Trillo then indicated that the Cooperative Relationship working group met twice during the first half of 2021. He added that the first meeting was held on 16 March and that, following a number of issues raised at the meeting, the companies requested the organisation of a second meeting, which took place on 21 April.

The Central Delegate then points out that, of the issues discussed at the first meeting, he would like to highlight the following:

• Main developments in relation to the Resolution of January 13, 2021, of the Presidency of the State Agency for Tax Administration, which establishes the organic structure of the Central Delegation of Large Taxpayers: It was reported that the change was necessary not only because of the passage of time, but, above all, because of the need to adapt the census of taxpayers assigned to it to the operational capacity of the Central Delegation. Thus, it was commented that, in census terms, of the current 3,200 taxpayers assigned to the Central Delegation, approximately between 600 and 700 would be assigned to the Special Delegations, leaving the census of the Central Delegation at approximately 2,400 taxpayers, which would include 500 groups with all their dependent companies. On the other hand, as regards the deregistered entities, it was pointed out that control would be exercised by the Large Business Management Units and the Regional Inspection Units, but that said control would not vary and would be carried out based on the circumstances of each of the taxpayers.

• Analysis of specific risks detected from transparency reports: The Head of the Tax and Customs Control Department explained that as a result of these analyses it had been possible to determine operations in which the criteria of the Tax Agency and that of the company did not coincide. Likewise, the entities were presenting operations that they had not yet carried out in order to know the opinion of the Administration in advance, such as in matters of R&D&I, capitalisation reserves, etc. In any case, it was highlighted that transparency reports were increasing in their usefulness, facilitating the ability to reach reasonable prior interpretations for all actors in legal-tax relations or, at least, as a mechanism for the taxpayer to know a priori the criteria of the Tax Agency, even if they could subsequently act as they considered appropriate.

• Latest criteria notes published on the Tax Agency website: Mr. Manuel Trillo points out that he will only briefly refer to the Note on various issues relating to the application of the deduction to avoid legal international double taxation (DDII) regulated in article 31 of the Revised Text of the Corporate Income Tax Law and the Corporate Income Tax Law (LIS), since the Director of the Department of Financial and Tax Inspection has commented on the other two notes. Thus, at the meeting it was discussed that the requirements for the correct application of the deduction were:

  1. That the effective payment of the withholding in the other State is proven.

  2. That the withholding required in the other State was derived from the Double Taxation Agreement signed with it. If the amount was higher, the entity should request the return of the excess from the State that made the withholding.

• Tax on Certain Digital Services: It was reported that the General Directorate of Taxes was working on an interpretative resolution, which has already been published, in relation to this new tax. It was also reported that requests had been made to potential consumers of the services subject to the tax in order to obtain useful information for the Tax Agency in view of the presentation of the first self-assessment scheduled for the month of July.

The Central Delegate then reiterated that at the working group meeting in March, the companies had requested that a second session be held based on the proposals that they would send to the Technical Secretariat of the Forum for this purpose. The meeting took place on April 21, and the companies explained that the document contained a series of reflections based on the experience of these years on the current state of the cooperative relationship, its future prospects, the need to transfer the cultural change that this entailed to the entire Administration, the definition of the model that was intended to be promoted and its objectives, etc. For its part, the Tax Agency stated the following:

• The cooperative relationship has been firmly supported and clear proof of this is that, as the General Director has already pointed out, it is one of the fundamental axes of the organization's Strategic Plan, to which more and more resources are being devoted.

• In a progressive and growing manner, cooperative relationship instruments have been assuming greater relevance. An example of this is the importance that prior appraisal agreements (APA) have been acquiring, a program that already has 25 years of experience and in which the Spanish Administration was a pioneer in Europe, and mutual agreement procedures.

• It was stressed that progress in cooperative relations did not depend exclusively on the Administration, since in a bilateral tax-legal relationship, both parties had to be involved in its development.

• Regarding transparency reports and the recurring request by companies for a feedback that they may submit to their boards of directors, it is reiterated that it is not provided for in our legislation, but that, nevertheless, when the years in which said reports have been submitted begin to be verified, the entities that have submitted them will begin to appreciate that the audits by the Tax Agency will place emphasis on the issues that were not verified in them.

Mr. Jesús Gascón then thanks Mr. Manuel Trillo for his intervention and offers the floor to those present in case they wish to make any comments in relation to the working groups. Since none were produced, the Secretary of State moved on to the next item on the agenda.

6. Expert group for tax reform

Ms. Inés Bardón states that in April 2021 the Ministry of Finance approved a resolution creating a committee of experts to analyse the Spanish tax system as a whole and, in particular, certain areas such as environmental taxation, corporate taxation, taxation of the digitalised economy, taxation of emerging economic activities and the application and specification of the harmonisation of property taxation. He added that the committee has undertaken to present its report in February 2022 and that, in order to ensure the participation and collaboration of all interested parties, it has opened a public consultation process so that entities or individuals who wish to do so can send their contributions, which will be the subject of study.

Next, for the development of this point on the agenda, he gives the floor to the Director General of the Tax Agency.

Mr. Jesús Gascón points out that a section has been created on the website of the Institute of Fiscal Studies dedicated to the committee of experts and that the link for sending contributions can be found there, the deadline for which ends on July 15. He added that the Tax Agency is in constant contact with the committee, supporting it both in the simulation calculations it requests and in transmitting the problems noted by the organisation in the application of the tax system. In this sense, it offers attendees the possibility of sending the committee any reflections that this Forum considers pertinent, without prejudice to the possibility of those who wish to do so also sending their individual contributions directly. On the other hand, he adds that, as regards its composition, the committee is not made up of civil servants or professionals from the world of consultancy other than academics, so it is understood that its work will not consist of the elaboration of detailed topics or specific legislation or the solution of specific regulatory problems, but it will have an orientation from the legal point of view, since the composition of the group presents a certain balance between economists and jurists. Furthermore, although half of its members are not residents of Madrid, technological advances resulting from the health crisis have favoured the holding of non-face-to-face meetings. The Ministry of Finance, through the Institute of Fiscal Studies, is responsible for secretarial tasks.

The Secretary of State then gives the floor to those present.

Next, Ms. Begoña García-Rozado intervenes, pointing out that Law 7/2021 provides for the creation of the Committee of Experts on Climate Change and Energy Transition and asks how it will be compatible with the group of experts for tax reform.

The Secretary of State replies that there will not be two groups of experts in environmental taxation and that the functions of the Committee provided for in the Law on climate change and energy transition will be subsumed within those of the committee of experts already formed.

Since there were no further interventions, Ms. Inés Bardón moved on to the next point on the agenda.

7. New Headquarters of the Tax Agency

Ms. Rosa María Prieto took the floor to inform those present that the Tax Agency has been working for some time now on the preparation of a new electronic headquarters, which is expected to come into operation in mid-July and which will integrate what we now know as the Portal and the Headquarters. The new website will represent a step forward in usability and will focus on the taxpayer's point of view, so that they can carry out their procedures and consult the information available on the subject in one place. The Director of the Planning and Institutional Relations Service adds that initially and for a period of approximately three months, to facilitate the transition, a link to the new headquarters will be offered from the current pages. After this period, the reverse will be done and a link to the current ones will be offered from the new website. It also indicates that coexistence is planned until the end of the year, when only the new electronic headquarters will be operational. On the other hand, he points out that the Technical Secretariat will keep those present informed about the launch of the new website so that, from the outset, they can communicate any aspects that they consider need improvement or any incidents detected.

8. Next call

The Secretary of State stated that the intention is to maintain the biannual frequency of the meetings and that the next one would be held, foreseeably, in November.

9. Other considerations, requests and questions

Next, Ms. Inés Bardón opened the session.

Ms. Begoña García-Rozado takes the floor to reiterate an issue that is a constant concern for companies and that has been raised in numerous meetings, both in plenary sessions and in working groups, which is the issue relating to the data published by the Tax Agency on the taxation of large companies. He adds that this is an issue that can be worked on with a view to the future, since entities have reports on the taxation of large companies, not only in terms of corporate tax, but also in terms of all the tax rates to which they are subject. In this sense, it also proposes studying some modification in the Country by country Report ( CbCR ), so that some element is included that better illustrates the taxation of large companies. Finally, Ms. Begoña García-Rozado points out that another point of concern is the global minimum rate and the prospects for progress in this regulation, which affects not only the tax rate, but also the basis on which it will be applied.

The Secretary of State responded that large companies will obviously be affected by pillar one and pillar two and pointed out that, given that international taxation is very much on her daily agenda and that of the Director General, the advances made in this area will be shared with the representatives of the companies in this Forum.

Finally, the Secretary of State for Finance thanked all those attending and closed the twenty-second plenary session of the Large Business Forum, saying goodbye until the next meeting.