Minutes of the meeting

Large Companies Forum

MINUTES OF THE PLENARY SESSION 1/2023

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

Deputy Central Delegate

Mr. Joan Cano Garcia

Deputy Director General of Legal Management and Legal Assistance - Department of Financial and Tax Inspection

Mr. Manuel Luis Martínez Cabeza

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

Mr. 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

Global Head of Taxes

Mrs. Carmen Alonso Peña

BBVA

Director of the Tax Department

Mr. Jose Maria Vallejo Chamorro

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

GENERALI ESPAÑA

Director of Accounting Area

Mr. Martí Jo Ruiz

IBERDROLA

Global Director of Tax

Mrs. Begoña Garcia-Rozado Gonzalez

IBERIA

Spanish Tax Lead

Mrs. Cristina Santana Negrin

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

NATURGY ENERGY GROUP

Director of Tax Planning

Mr. Baltasar Gomez Febrel

REPSOL

Director General of Economic and Fiscal Affairs

Mr. Luis Lopez-Tello and Diaz Aguado

SEAT

Director of Taxes and Customs

Mrs. Susana Sanchez Arenas

SIEMENS

Director of Taxes

Mrs. Ana María Moreda Galante

TELEFÓNICA

Fiscal Director

Mr. Angel Martin Gomez

VODAFONE

Director of Tax Advisory

Mr. Javier Viloria Gutierrez

Technical Secretariat of the Large Companies Forum

Technical secretary

Ignacio Fraisero Aranguren

The twenty-sixth plenary session of the Large Companies Forum will be held on June 8, 2023, with the attendance of the persons mentioned above, and in accordance with the following:

AGENDA

1. Opening of the session.
2. Approval of the minutes of the meeting held on November 15, 2022.
3. Evaluation and progress in the cooperative relationship: survey and information on transfer pricing.
4. Approval, where appropriate, of the document prepared by the Cooperative Relationship working group “Proposal for the voluntary submission of documentation on related-party transactions within the Code of Good Tax Practices”.
5. Summary of the Working Groups of the first semester.
6. European Presidency: issues in the field of Customs and Excise.
7. Next call.
8. Other considerations, requests and questions.

1. Session opening

The session is opened by Ms. Soledad Fernández Doctor, Director General 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, apologises for the absence of Mr. Jesús Gascón Catalán, Secretary of State for Finance and President of the Forum, who was prevented from attending the plenary session due to scheduling problems. He also congratulated the new representatives of Renault and SEAT, Mr. Jesús Pérez Esquide and Ms. Susana Sánchez Arenas, respectively, on their new positions and thanked their predecessors, Mr. Félix Ruiz Madarro and Mr. Javier Baulenas Setó, for their work and collaboration in support of the work of this Forum. It also reports that the entity NORFIN HOLDER has announced its withdrawal as a member of the Large Companies Forum, as it has considered it appropriate to make way for other entities to form part of the Forum and make their contributions in this space for cooperative relations. He also thanks his representative, Mr. José Antonio Gibello Saiz, for his dedication and collaboration.

On the other hand, the Vice President of the Forum points out that, as is known to all those present, in compliance with the commitments assumed by Spain in Component 27 of the Recovery, Transformation and Resilience Plan, an evaluation of the application of Law 11/2021 on measures to prevent and combat tax fraud is planned to be carried out in the 4th quarter of 2023. Thus, once again, it requests the collaboration of the entities represented in the Forum in order for them to transmit to the Tax Agency, through the Technical Secretariat, their observations on the different measures contained in Law 11/2021, both those that are considered correct and those that are susceptible to improvement and, even, those whose results have not been as expected and which it would be desirable to redirect. Ms. Soledad Fernández Doctor thanks in advance the collaboration that companies will undoubtedly provide in this task.

The Director General of the Tax Agency then comments that at the present plenary session, after approving, where appropriate, the minutes of the previous meeting, the Central Delegate and the Deputy Central Delegate will present a series of considerations in relation to the evaluation and progress in terms of cooperative relationships, with special reference to the survey carried out on the model, as well as to the information on transfer prices and, subsequently, the document prepared by the Cooperative Relationship working group “Proposal for the voluntary contribution of documentation on related-party transactions within the Code of Good Tax Practices” will be submitted to the Plenary Session for approval. Ms. Soledad Fernández Doctor indicates that, basically, the purpose of this proposal is to advance the cooperative model between the Tax Agency and the companies adhering to the Code of Good Tax Practices, promoting transparency and legal certainty in compliance with tax obligations. He added that, of course, the provision of documentation will be voluntary.

Finally, the Vice President of the Forum indicates that the Director of the Tax Management Department, the Deputy Director General of Legal Management and Legal Assistance of the Financial and Tax Inspection Department and the Director of Customs and Excise Taxes, will present the results and perspectives of the different Working Groups and, to conclude the plenary session, the Director of the Customs and Excise Department will make a brief presentation on the main projects of the area of her department in relation to the Spanish presidency of the European Union in the second half of this year.

2. Approval of the minutes of the meeting held on November 15, 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 25th session of the Plenary Session of the Forum of Large Companies were sent to the members of the Forum as documentation attached to the notice of the present plenary meeting 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, the minutes of the plenary session of November 15, 2022 are hereby declared approved.

3. Evaluation and progress in the cooperative relationship: Survey and information on transfer pricing

The Director General of the Tax Agency gives the floor to the Central Delegate for Large Taxpayers, Mr. Manuel Trillo Álvarez, who recalls that in the last plenary session of the Forum two initiatives were proposed that were intended to be implemented by articulating them through the Cooperative Relationship working group:

1) the carrying out of a survey on the status of the cooperative relationship in which the Administration and the companies adhering to the Code of Good Tax Practices would participate, since, given the time elapsed since its approval, it seemed reasonable to carry out an analysis of the status of the model;

2) approval, where appropriate, of the document prepared by the Cooperative Relationship working group “Proposal for the voluntary contribution of documentation on related-party transactions within the Code of Good Tax Practices”.

Mr. Manuel Trillo then comments that, comparing the current situation with that in 2010, in his opinion there is no doubt that progress has been made. He also points out that, in conclusion, the survey results indicate that it was necessary to review and reconsider what has been done in terms of cooperative relations. He adds that these results should be taken as a turning point, from which to work on promoting the model, if that is the will of all those involved. Finally, he gives the floor to the Deputy Central Delegate, Joan Cano García, who has been responsible for directing, fundamentally, the design of the survey and shaping it through a computer application that guarantees anonymity.

Mr. Joan Cano begins his speech by pointing out that almost all the existing cooperative relationship models in the world have been subject to evaluation and, in some cases, their implementation has even been preceded by a test phase, after which they have decided whether to continue with the project or not. In Spain, after almost 15 years since its inception, everything indicated the need to launch this evaluation process. Thus, in the last meetings of the Cooperative Relationship working group, work had been carried out on preparing an instrument that would allow us to see the situation of the model. In the first phase, a series of quantitative data (number of litigations, consultations, etc.) were taken into consideration in order to see if it was possible to make an approximation of that nature that would be relevant, but this was discarded, as it was found that it offered insufficient results. Finally, it was decided that, in order to obtain a more global overview of the current situation of the model, it was appropriate to prepare four surveys to collect the opinions of those involved, that is, on the part of companies, members of this Forum and those adhering to the Code of Good Tax Practices and, on the part of the Administration, the Chief Inspectors of the Tax and Customs Control Units and the Heads of National Inspection Teams, since the former hold interviews in relation to the transparency reports and the latter are those who will most easily have made contact, during their actions, with taxpayers adhering to the Code. The Deputy Central Delegate added that, with regard to the content, the Administration prepared the drafts that were completed with the comments and proposals of the entities participating in the working group. In addition, in order to guarantee the anonymity of the respondents, the Spanish Government's corporate application FORMA was used, whose technical characteristics have not allowed the survey to be available for a long period of time. Although the working group decided that 5 working days seemed sufficient, it should be noted that there were two cases in which the respective entities requested, outside the specified period, to be able to complete the survey, which logically was no longer possible. On the other hand, regarding the conclusions derived from the surveys received, the Cooperative Relationship working group is also working on a document that, when finalized, will be sent to all members of the Forum, so that they can make any comments they consider appropriate.

The Deputy Central Delegate then makes a brief comment regarding the questionnaires received from the four groups:

- Survey addressed to the Heads of National Inspection Teams: Participation was just under 60%, which for the Administration is not a satisfactory figure and will have to be analysed. Without going into detail, the responses provide the following data:

1. A large majority of officials have a good knowledge of the model and, specifically, of the Large Business Forum and the Code of Good Tax Practices.
2. When asked about the checks they may have carried out on entities that are members of the Forum or adhere to the Code of Good Tax Practices, a substantial part of those surveyed answered that they had carried them out, confirming a high level of knowledge of all the previous actions carried out with these taxpayers.
3. As regards the general tax behaviour of the inspected entities, most of the Team Leaders have expressed a positive opinion regarding the conduct of these companies. Only in one specific case has unsatisfactory behaviour been reported. The majority of respondents also responded that they did not see any distinctive characteristics in the fulfilment of tax obligations between the member entities of the Forum or those adhering to the Code of Good Tax Practices and the rest of the companies inspected.
4. In relation to the question of whether there was any change in the behaviour of the entities since their incorporation into the Forum or their adherence to the Code, the majority response was not affirmative. Those who said they did see differences referred to greater rigour, reliability, transparency and collaboration on the part of companies.
5. Most of them responded that the attitude of the representatives of the entities in terms of collaboration and transparency during the course of an inspection procedure is good, although some Team Leaders warn about delays in the delivery of documentation.
6. As regards the entities that submit the transparency report, the majority of officials have responded that they are correct, but very general, delving relatively little into the aspects of strategy and fiscal risk. However, there are some cases in which it has been answered that the transparency report was particularly well prepared, highlighting its quality.
7. The majority of respondents said they were in favour of continuing to carry out in-depth general audit procedures on entities over the following years.
8. On the question of whether there should be exclusion mechanisms for entities that do not meet the requirements of the cooperative relationship model, the almost unanimous response has been affirmative.
9. The overall assessment of the model is positive, and it is generally considered useful for promoting voluntary compliance with tax obligations. However, a significant proportion of respondents do not see any specific advantages for the administration.

- Survey addressed to the Heads of Tax and Customs Control Departments: In this case, participation was 100% and the answers were quite similar to those provided by the Team Leaders. Thus, only the following particularities are highlighted:

1. They demonstrate a good knowledge of the mechanisms of cooperative relationships, although they are more familiar with the Code of Good Tax Practices than with the Large Business Forum. They are also highly familiar with the background of previous actions carried out with these entities.
2. They agree with the Team Leaders that the transparency reports do not go into great depth on the subject of fiscal risk. Furthermore, since the Chief Inspectors are the ones who hold meetings with the representatives of the entities on the occasion of the transparency report presented, they point out that, although these are positive in general terms, the meetings do not go into such a level of detail that would allow definitive decisions to be taken on matters of fiscal risk in relation to these companies. That is to say, although they say that it is a useful instrument, they also believe that it can be improved.

Regarding the responses provided by these two groups, the Deputy Central Delegate said that he was surprised that in both cases the model was highly valued, but that, nevertheless, a significant proportion of those surveyed did not see any specific advantages for the Administration as being derived from it.

- Survey addressed to members of the Large Business Forum: Ten entities participated, and in all cases the questionnaire was completed by a person who regularly participates in the Forum sessions on behalf of their entity. From the answers, without going into detail, the following data can be highlighted:

1. In relation to the time they devote to preparing the Forum meetings, 80% of the entities state that they have prepared some document for them.
2. In terms of communication, companies maintain more contacts with each other, before or after meetings, than with the Administration.
3. The majority of the participants value the functioning of the Forum positively, although 30% say that it does not contribute much to member companies.
4. 60% of the entities are in favour of establishing some mechanism for renewal of the entities that participate in the Forum.
5. When asked whether there should be mechanisms for excluding entities that fail to comply with the requirements of the cooperative compliance model, 80% answered yes, although a wide variety of opinions were expressed regarding the circumstances that could lead to such exclusion.
6. 30% of respondents said they would like to participate in one of the working groups that they are not part of, with the greatest interest being in those that address new developments and regulatory issues.
7. As regards the control actions to which the entity has been subjected, the majority has responded that the actuaries are aware of the Code of Good Tax Practices, but that, nevertheless, they act in relation to a company that adheres to the Code in the same way as with one that is not.
8. In relation to the question of whether the Administration uses reasonable criteria in the interpretation of tax regulations, the answer is mostly negative, alleging a desire to collect taxes, a lack of knowledge and sensitivity about the real operation of the company in question or that the Tax Agency interprets non-fiscal regulations, something that other ministries should do.
9. When asked about their own conduct during the verification procedures, most of the entities replied that it was basically unbeatable, although in some cases they admitted having incurred delays in the delivery of documentation due to certain administrative difficulties of the company.
10. As regards the general relationship with the tax authorities, 50% say that it has improved since joining the Forum, while the other 50% say that it has remained the same. Furthermore, 60% say they have made significant changes in the management of their tax obligations after joining the Forum.
11. Most of them say that the dialogue with the Administration is good, although some entities indicate that it would be desirable for it to be centralised in a single person.
12. The entities that have responded that they use prior valuation agreements indicate that they are a positive instrument, although they demand greater agility and speed in their processing.
13. Six entities are currently involved in litigation with the Administration, although only two of them state that this affects structurally relevant aspects of the company's operation.
14. In relation to whether litigation has decreased, 80% of respondents answered negatively, expressing a considerable variety of opinions regarding possible solutions to achieve a reduction in conflict.
15. Finally, all entities value the cooperative relationship model positively, although 40% believe that their company does not obtain any advantage from applying the model.

The Deputy Central Delegate points out that, as with the Administration recipients who were surveyed, he was surprised that the model was also highly valued by the Forum member entities, but that, nevertheless, a significant part of those surveyed did not see any advantages for their group as a result of it. Likewise, Mr. Joan Cano comments that he has also been struck by the fact that 80% of entities state that litigation has not decreased, when the empirical data handled by the Tax Agency indicate that it has.

- Survey addressed to entities adhering to the Code of Good Tax Practices: The Deputy Central Delegate indicates that, given that it has been extended more than expected with the data from the three previous groups, in this case it will be much shorter. He added that 10 entities completed the survey and, in general, were less critical of the Administration's actions. For example, they have mostly stated that the criteria used by the Administration are reasonable, although they do not share them. However, there are responses that coincide with those of the Forum's member entities, such as those relating to the lack of agility of the procedures, the need for a single interlocutor or the fact that the use of some of the model's mechanisms, such as the transparency report, has specific consequences.

Finally, Mr. Joan Cano offers the floor to those present in case they wish to make any comments or observations or clarify any doubts.

First of all, Mr. Carlos Lázaro, representative of Banco de Sabadell, took the floor. After thanking the work carried out, he said that in his opinion, carrying out the survey was a success, since it represents a process of internal reflection for all members of the Forum, companies and the Tax Agency, on how to improve the cooperative relationship model which, as the Central Delegate for Large Taxpayers has indicated on previous occasions, is bilateral.

Mr Javier Viloria Gutiérrez, representative of Vodafone, then points out that he agrees that the survey exercise should be carried out. He adds that he is convinced, however, that it will be difficult to reach conclusions, since there are many nuances. On the other hand, he comments that all companies, not just the members of the Forum, benefit from the advances in the cooperative relationship model, and that this is the idea that has always guided his actions in the work of the Forum. He added that Vodafone would of course like to remain a member of the Forum, but that he believed rotation was a good idea. He also indicated that, in relation to conflict, he feels that there is too much of it, although objective data indicate that it has decreased. He also points out that the reasonableness of the Administration's actuary in a specific matter and its impact on legal disputes can be seen in various court rulings.

Mr Joan Cano responds that he agrees that it will be a very complicated process. He added that the working group has already prepared a provisional document, but that, for the moment, it has not been discussed because the Tax Agency needs to carry out a more in-depth analysis and compare it with the companies again. He also reiterated that he agrees that an instrument of this nature is always difficult to interpret, but believes that, at least from the aspects that are clearer, conclusions can be drawn that will undoubtedly be positive for the functioning of the model.

Next, Mr. Antonio Lafuente González de Suso, representative of Mapfre, expressed his gratitude for the survey having been carried out and added that, in his opinion, the positive aspect is that those who received it value the model positively, although they are aware that there are possibilities for improvement. On the other hand, he comments that in the English model, large companies have an official of the HMRC who participates as another employee of the entity in the circumstances and major decisions of the same. He adds that, in this way, the need for general verification procedures disappears, saving resources for the Administration and companies. Thus, he points out that his proposal for improvement goes in this direction, since the resolution of a conflict several years after an event has occurred, can cause serious economic damage to the Administration or to the entity, depending on who is favored by the court ruling and its retroactive effects. Finally, the Mapfre representative indicates that, in his opinion, an important instrument for advancing in the reduction of conflict would be greater involvement and communication between the parties, establishing a true dialogue, so that controversies could be resolved as they arise and not several years later.

Next, Ms. Begoña García-Rozado González, representative of Iberdrola and collaborator of the Technical Secretariat of the Forum representing the companies, spoke. She thanked the participants for the work carried out, adding that it had been a very instructive exercise. He also indicated that the working group has been analyzing the results of the survey and that, on the part of the companies, the following aspects can be highlighted, although they are very general:

1. It is necessary to continue with the cooperative relationship model, regardless of its potential for improvement.
2. More training is required in relation to the model, especially on the part of actuaries in the Administration, since companies are very familiar with cooperative compliance and it would be desirable to see the same in the day-to-day activity with Administration staff and not only in the scope of this Forum.
3. The fundamental objective is to reduce litigation, with the consequent cost savings for all parties involved, in addition to its reputational effects.
4. The Administration gives little importance to transparency reports, without taking into account the effort that their preparation requires for companies.
5. It is surprising that the Administration continues to support the traditional model of verification.
6. As regards the Forum and its working groups, it is necessary to reflect on their functioning and the possible improvements that could be introduced.
7. Some kind of legal coverage is necessary, which companies have been demanding for some time now.
8. Regulation of exclusion mechanisms is required, which, on the other hand, would be for exceptional cases.
9. Finally, the main conclusion is that we need to carry out a deep reflection on the cooperative relationship model and decide in which direction to continue evolving.

Ms. Carmen Alonso Peña, representative of Banco Santander, indicates that, indeed, what Begoña García-Rozado pointed out are some first impressions that the survey data have produced in companies. He added that, in coordination with the Tax Agency, conclusions will have to be drawn from the data in the questionnaires and a decision will have to be made on which direction to move forward, determining which specific aspects can be improved. On the other hand, he indicates that, in his opinion, more training in the business world is very necessary for new inspectors, so that they know not only the theoretical part, but also acquire early knowledge of the economic reality of the entities. In this regard, Ms. Carmen Alonso reiterates the offer that companies have made on previous occasions to participate in the courses that the IEF provides to new staff, so that this group can learn more about the business world.

The Director General of the Tax Agency then thanks the members of the Cooperative Relations group for the work they have carried out and for the data they have presented. He added that he agrees with what several of the people who have spoken about needing to carry out a process of deep reflection and self-criticism, and to decide how to improve the model in order to achieve more positive results, both for the entities and for the Administration.

Mr. Manuel Trillo then reiterated what he had said at the beginning of his speech, that the survey had served to review and reconsider what has been done in terms of cooperative relations in recent years. He also points out that it is normal for those surveyed to have highlighted, in some way, the aspects of the model that are working less well, but that, in his opinion, there are others that are working very well. The Central Delegate also reiterates what he has already commented on on previous occasions in relation to the fact that the cooperative relationship model is bilateral, so its development has to be carried out by both parties. In this regard, he adds that, in his opinion, transparency reports are the best tool that has been implemented in the area of cooperative relations and that, currently, their effects are beginning to become clearly evident, given that audits are already being carried out on exercises in which there are companies that voluntarily presented them. He adds that there are reports that are very well prepared and of high quality, but that, nevertheless, there are also others that are not so good. Thus, Mr. Manuel Trillo points out that, although there has been improvement in the area of cooperative relations, in his opinion, we have not yet reached a point where we can say that all expectations have been met and that we must go one step further. Finally, the Central Delegate comments that the results of the survey will be included in a document that will reflect the vision of both companies and the Administration on the model, as well as a statistical analysis of the data.

4. Approval, if applicable, of the document prepared by the Cooperative Relationship working group “Proposal for the voluntary contribution of documentation on related-party transactions within the Code of Good Tax Practices”

Mr. Manuel Trillo begins the development of this point of the agenda by commenting that, as all those present know, the Cooperative Relationship working group has also been working on drafting a document that would establish the possibility of providing, on a strictly voluntary basis, information relating to transfer pricing, that is, that contained in article 18 of Law 27/2014, of November 27, on Corporate Tax and articles 13 et seq. of the Corporate Tax Regulations, approved by Royal Decree 634/2015, of July 10. The Central Delegate adds that obtaining this information early would facilitate a better understanding of the taxpayer's activities by the tax authorities and, in particular, would greatly complement the content of tax transparency reports. It also indicates that the voluntary submission of documentation would be carried out once six months have passed since the end of the Corporate Tax declaration period and would affect both groups whose parent company resided in Spain, as well as those belonging to non-resident business groups, and in the first case the documentation collected in article 15 of the IS Regulations must be submitted with regard to the group (masterfile) y la prevista en el artículo 16 respecto de las entidades residentes y, en el segundo caso, la documentación sería exclusivamente la prevista en el artículo 16 del Reglamento (oclalfile). Finally, Mr. Manuel Trillo insists that transparency reports are a set of information that is very useful to the tax authorities, but that, nevertheless, not even the best of them reach a level of depth that allows the authorities to reach absolute certainty on certain aspects, although they do contribute, in principle, to ruling out some risks. The aim of the proposal, which is being submitted for approval by the Forum members today, is to continue to make progress in transparency. Its main advantage is that the documentation to be provided does not have to be specifically prepared to fulfil the commitment, as the entities are legally obliged to prepare it.

Mr. Daniel Gómez-Olano González, representative of FCC, then indicated that, in relation to the survey on the cooperative relationship model, in his opinion, the five-day period for participation was insufficient, given that many of the recipients had to deal with other matters that required their full attention. On the other hand, she points out that she agrees with what Ms. Begoña García-Rozado has said and that, in addition, she wishes to emphasize the importance of specific incentives in promoting the model. The FCC representative therefore believes that staff should be redistributed and part of the existing resources should be allocated to experts in cooperative relations, with a different perspective, so that the analysis of the documentation provided by the companies would allow the Administration to achieve a high degree of certainty, which, on the other hand, would imply a reduction in the staff that would have to be allocated to traditional verification activities. He also adds that the proposal for the voluntary provision of transfer pricing documentation, in the abstract, seems to him to be a good initiative as a means of reducing litigation, achieving a higher level of certainty, etc., but that, as with transparency reports, there needs to be specific incentives and for entities to receive feedback in relation to the documentation provided, albeit with the limitations and cautions that the Tax Agency deems appropriate.

The Director General of the Tax Agency then asks the members of the Cooperative Relations working group to, once the survey data has been analysed and the conclusions derived from it have been drawn, study in depth possible avenues or solutions that will allow progress in transparency for both parties, thus promoting legal security and certainty.

Mr. Jacinto Esclapés Díaz, representative of AMADEUS IT GROUP, then comments that, in his opinion, the fact that the initial members of the Forum continue to participate in it, with the exception of the recent departure, is indicative that, to some extent, there is awareness of the advantages that the cooperative relationship model implies, which undoubtedly supports the possibility of continuing to work, at least with regard to AMADEUS IT GROUP, in the search for solutions to the challenges that are presented. On the other hand, in relation to the proposal to provide documentation of related-party transactions, Mr. Jacinto Esclapés points out that there are entities, such as AMADEUS IT GROUP, in which this information is essential to understand their business model, and therefore constitutes a complement to the transparency report, being essential to understand its content. He therefore indicates that it seems more logical for the deadline for submitting transfer pricing documentation to coincide with that of the transparency report, thus strengthening their link, and insists that the AMADEUS case is one more, but essential, aspect of the same. Finally, he points out that, on the other hand, there are companies in which information on transfer prices is not particularly relevant, so it might have been appropriate to include in the document the profile of the entities concerned, while always keeping in mind the voluntary nature of their contribution.

The Central Delegate replied that he did indeed agree with the relevance of this documentation for certain entities, but that it was not considered appropriate to make it clear that the proposal was directed exclusively at these entities, preferring to establish the voluntary nature of the contribution for all companies. In addition, regarding the submission deadline, it is noted that the deadline stated in the document may be considered indicative, but that, even if some entities do not comply with it, the Tax Agency will take into consideration the documentation provided. On the other hand, in reference to the quid pro quo derived from the contribution of this documentation, Mr. Manuel Trillo reiterates what he has commented on previous occasions regarding the transparency report, that is, the absence of legal coverage for the issuance of this type of reports and that, nevertheless, the information voluntarily provided by a specific entity allows the Tax Agency to have greater knowledge in relation to it, which has a positive impact on a subsequent verification process. He also added that in no case can the Administration give preferential treatment to entities that voluntarily provide documentation, which would result in some type of privilege, in relation to other taxpayers who do not do so.

For his part, Mr. Daniel Gómez-Olano points out that no type of privilege is being claimed, but rather that it would be a matter of doing what is already being carried out in other tax administrations, especially in Anglo-Saxon law jurisdictions, which have procedures such as the fast track. Así, al igual que la Agencia Tributaria está facilitando respuestas ad hoc a consultas concretas realizadas por las empresas, sería conveniente que se pudiera recibir información de retorno, probablemente desde la ONFI, en cuanto a lo consignado, por ejemplo, en el masterfile of the entity, so that it could have some appreciation in this regard in relation to the bases of its model.

Ms. Begoña García-Rozado adds that, in terms of cooperative relations, it would be positive to establish objective criteria that would allow companies to be rated based on their compliance and that, based on this, differentiated treatments could be established.

Next, Mr. José María Vallejo Chamorro, representative of BBVA, points out that, in his opinion, progress has been made in cooperative relations, although there is room for improvement. He added that he also agrees with the interventions that have been made in that the survey should serve to carry out a reflection on the model and together look for ways to promote it.

Since there were no further interventions, the Vice President of the Forum submitted to the decision of those present the document prepared by the Cooperative Relations Working Group “Proposal for the voluntary contribution of documentation on related-party transactions within the Code of Good Tax Practices”, which was approved unanimously. Likewise, Ms. Soledad Fernández Doctor points out that the document will be published on the electronic headquarters of the Tax Agency, in the section dedicated to this Forum.

5. Summary of the first semester's working groups

Firstly, the Director General of the Tax Agency gives the floor to Ms Rosa María Prieto del Rey, Director of the Tax Management Department, so that she can comment on the activity of the working group for the Analysis and rationalisation of indirect tax burdens.

Ms. Rosa María Prieto comments that the working group met on June 1 and that the Deputy Director General of Tax Technology participated on behalf of her Department, whose intervention can be briefly highlighted as follows:

• In relation to the Corporate Tax campaign, it was reported that the ministerial order was published in the BOE on May 29, although the technical specifications and the practical manual had been published on the 23rd of that month. The new features introduced in the declaration models were also analysed in order to include the new boxes approved as a result, mainly, of the regulatory changes, and the following can be highlighted:
  • In the section that includes agricultural and/or livestock activities, the net amount of the turnover must be recorded so that the Tax Agency can inform the Ministry of Agriculture, Fisheries and Food, thus facilitating the management of the CAP aid.
  • The information on the special dissolution and liquidation regime for the SICAV must be completed.
  • Certain entities under the income attribution regime are included as taxpayers of the Corporate Tax in order to correct hybrid asymmetries.
  • In the Special Regime for Ships and Shipping Companies in the Canary Islands, the information is broken down so that the offsetting of negative tax bases derived from the activities that generate the right to apply the special regime can be monitored, thus avoiding offsetting them with the positive bases generated by the rest of the entity's activities.
  • Start-ups must report the net amount of their turnover for the twelve months preceding the start date of the tax period.
  • The first page of the model identifies the entities that, without being credit institutions, use the account statements applicable to them.
  • Finally, among other things, the modifications affecting deductions were also discussed, in order to allow them to be carried forward to subsequent years, and those related to minimum taxation.
• As regards the issues related to the entry of withholdings in different territories based on the volume of operations of the group, the companies highlighted the existing problems, insisting that in order to reduce administrative burdens it should be possible to present the annual information to the Tax Agency and that the latter, through exchanges of information, should send it to each regional treasury. The representatives of the Administration replied that they were aware of the difficulties, the solution being complex, but that they had to act in accordance with the criteria established by the Arbitration Board.

The Director General of the Tax Agency then gave the floor to Mr. Manuel Luis Martínez Cabeza, Deputy Director General of Legal Management and Legal Assistance, who, after apologising for the absence of the Director of the Department of Financial and Tax Inspection, indicated that at the meeting of the working group for the Analysis of tax regulations and the reduction of conflicts, which took place on 17 May, the “Note on the application by the tax consolidation group of negative taxable bases and deductions from previous years”, published on the electronic headquarters of the Tax Agency, was analysed. Thus, Mr. Manuel Martínez indicates that at the meeting it was explained that the purpose of the note, in the preparation of which various bodies of the Administration had intervened, was to serve as a tool to assist the taxpayer, in line with other instruments such as WEB Companies, the objective of which was to explain what are the criteria that inform the form for the completion and presentation of model 220, that is, the rules on which its validations are based. Following the explanations given by the Tax Agency regarding these rules, some of the participating entities expressed their disagreement with some of the criteria contained in the note. They also raised a number of issues, including the following:

• Regarding the terminology used, it was indicated that the references made in the note to an “artificial use of tax credits” could lead to the existence of abusive conduct if the Administration's opinion was not shared, to which the representatives of the Department of Financial and Tax Inspection responded that they understand that this is a discrepancy in the interpretation of the Law.
• The reports from the General Directorate of Taxes mentioned in the note were requested to be sent.
• Questions were asked about the time and scope of application of these criteria, to which the representatives of the Department of Financial and Tax Inspection replied that, although they were not forming the backbone of any type of control plan, they were being applied in the procedures of the inspection area, in which, on the other hand, the background information held by the Administration relating to the taxpayer in question was also taken into consideration.

To conclude his speech, the Deputy Director General of Legal Regulations indicated that it was also clarified that, as in the previous year, when completing form 220 there will be the possibility of not applying the Administration's criteria.

Ms. Soledad Fernández Doctor then gives the floor to Ms. Pilar Jurado Borrego, Director of the Customs and Excise Department, to comment on the activity of the Excise working group.

The Director of the Customs and Excise Department comments that, since the last plenary session, the working group has met twice, on December 1, 2022 and on February 23, extending the invitation to attend the meetings to all member entities of the Forum, given the interest expressed by several companies in relation to the Special Tax on non-reusable plastic packaging. Thus, Ms. Pilar Jurado points out that the last meeting was based on a document prepared by the companies with the issues that the application of the Tax raised for them on a daily basis, of which, broadly speaking, the following can be highlighted:

• In relation to the objective scope of the tax, the companies pointed out that, despite the efforts made by the Administration to clarify doubts, the lack of a fixed and permanently updated list of products subject to the tax generated doubts and legal uncertainty.
• As regards the determination of the tax base, the problems with secondary and tertiary packaging were mainly highlighted (packaging) and it was noted that in the United Kingdom this type of packaging was not taxed. In general, companies were in favour of an objective estimation method.
• An increase in the number of kilos of non-recycled plastic affected by the exemption was requested, indicating that in the United Kingdom this figure was 10 tonnes in the last twelve months.
• It was noted that it was difficult to obtain information from the supplier regarding the amount of unrecycled plastic. The request was also made to extend the possibility of issuing the responsible declaration, since the certification of recycled plastic by an accredited entity was very expensive.

Ms. Pilar Jurado indicates that during the meeting, questions were also raised regarding accrual, traceability, refunds and tax management, among others. He also noted that representatives from the Customs and Excise Department and the General Directorate of Taxes were informed that it was not feasible to make regulatory changes at that time and that it would be advisable for them to submit tax queries, providing specific data. Companies were also asked to submit their specific proposals regarding the Tax for analysis by the Administration and, in particular, those relating to the establishment of an indirect estimation method or the increase in exempt kilos.

Finally, the Director of the Customs and Excise Department comments that she has already stated in previous meetings that the Administration is aware of the complexity involved in this tax and its management, adding that it is also new for the Tax Agency. He also reiterated his request to those present to submit specific proposals that they consider could simplify and facilitate the management of the tax.

6. European Presidency: issues in the field of Customs and Excise

The Director General of the Tax Agency once again gives the floor to Ms. Pilar Jurado in order to comment on the files on customs and excise duties that will be processed during the Spanish presidency of the European Union.

The Director of the Customs Department and II. EE. indicates that there are basically two projects and that she will comment on them very briefly.

• Review of the Energy Taxation Directive: It should be noted that the current Directive dates back to 2003 and that the previous proposal for revision was put forward by the Commission in 2011, but was shelved due to a lack of agreement between Member States in 2015. The current proposal is for 2021 and the following can be highlighted:
  • It is part of the “Fit for 55", which includes a set of measures aimed, basically, at reducing emissions into the atmosphere by at least 55% by 2030, as well as making the European Union climate neutral by 2050.
  • It aims to standardize the subject matter by eliminating exemptions and establishing the repeal of various exceptions.
  • Tax rates are based on the calorific value of the product and are updated according to a consumer price evolution index.
  • The products covered by the Directive are expanded.
• Customs Code Review: Among the proposals of the current European Commission at the start of its activity in 2019 was to move forward in the field of the Customs Union. In order to promote this proposal, a group of experts was formed in 2021 and, in 2022, presented a series of conclusions, including the lack of homogeneity in the actions of the customs of the member states, as well as the lack of adaptation of their procedures to the new requirements demanded by the advance of electronic commerce. Thus, the following aspects can be highlighted from the current review project:
  • Creation of a single customs data centre, “ EU Data Hub ”, to which all companies will directly provide information, that is, they will only have to interact with a single portal to submit their customs documentation. For its part, the data center will be under the supervision of a single Customs Authority of the EU .
  • Strengthening the current Authorized Economic Operator program for trusted operators (new “ Trust and Check ”).
  • With regard to electronic commerce through online platforms, they will be the ones who acquire the status of importers and, therefore, will be exclusively responsible for ensuring that customs duties and VAT are paid at the time of purchase, as well as that the products comply with the regulations.
  • The exemption from customs duties for goods worth less than 150 euros is abolished.
  • In terms of timelines, the data centre will be operational for e-commerce shipments in 2028, followed on a voluntary basis by other importers from 2032, becoming mandatory from 2038.

7. Next call

The Director General stated that the intention was to maintain the biannual frequency of the meetings and that the next one would probably be held in November. He also reiterated what was said at the beginning of the session and indicated that the Technical Secretariat of the Forum will send them an email requesting their collaboration in order to prepare the final report on the results of the application of Law 11/2021, on measures to prevent and combat tax fraud. Likewise, it indicates that, in relation to the special tax on non-reusable plastic packaging, it also reiterates the request made by the Director of the Customs and Excise Department for specific proposals that companies consider would make the management of the tax more feasible.

8. Other considerations, requests and questions

Ms. Soledad Fernández Doctor offers the floor to those attending in case they wish to ask any questions or make any comments.

First of all, Ms. Carmen Alonso intervenes, asking about the status of the second pillar and recalling that in the previous plenary session she proposed to establish a specific working group for this issue, to which the Director General of the Tax Agency replies that this is a time of imapasse legislative, but will nevertheless transfer to the Secretary of State for Finance the proposal to create said working group, with the participation of the General Directorate of Taxes.

Mr. Javier Viloria then takes the floor to ask about the status of electronic invoicing, to which Ms. Soledad Fernández Doctor responds that work is being done on the regulatory development with the Ministry of Economic Affairs and Digital Transformation and that it is very advanced, but that, nevertheless, everything seems to indicate that its approval will have to wait until after the summer. On the other hand, as regards the regulation concerning the prohibition of the use of software dual-use, the Director General of the Tax Agency indicates that the project continues in the Council of State awaiting a report.

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