Minutes of the session

MINUTES OF THE PLENARY SESSION 1/2022

Minutes of the Plenary Meeting of the Small and Medium-sized Enterprises Forum
held on February 16, 2022

State Secretariat for Finance

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

Mr. Hector Fernando Izquierdo Triana

Office of the Secretary of State for Finance

Mrs. Ana Isabel Mateo Lozano

President of the Forum of Small and Medium Enterprises

Director General of the State Agency for Tax Administration

Mr. Jesus Gascon Catalan

Members representing the Tax Agency

Director of the Tax Management Department

Mrs. Rosa Maria Prieto del Rey

Director of the Department of Financial and Tax Inspection

Mr. Javier Hurtado Puerta

Director of the Revenue Department

Mr. Guillermo Barros Gallego

Director of the Tax Information Technology Department

Mr. Jose Borja Tome

Director of the Planning and Institutional Relations Service

Mr. Ignacio Fraisero Aranguren

Members representing Small and Medium Enterprises

Confederación Española de Organizaciones Empresariales (CEOE)

Director of the Department of Economics

Mr. Gregorio Izquierdo Llanes

Head of Tax Department

Mr. Bernardo Soto Siles

Spanish Confederation of Small and Medium-sized Enterprises (CEPYME)

General secretary

Mr. Luis Aribayos Minguez

Technical Secretariat of the Forum of Small and Medium Enterprises

Deputy Director General of External Communication

Mrs. Maria Dolores Carreno Beltran

The first plenary session of the Small and Medium Enterprises Forum will be held on February 16, 2022, with the following people attending, and in accordance with the following:

AGENDA

1. Opening by the Secretary of State for Finance and President of the State Tax Administration Agency. Objectives of the Small and Medium Enterprises Forum.
2. Round of interventions by representatives of Small and Medium Enterprises.
3. Approval of the Forum's Operating Rules.
   • Composition of the Technical Secretariat.
4. Constitution of working groups:
   • Code of Best Tax Practices.
   • Regulatory analysis and digitalization project.
5. Next call: dates and topics to be discussed.
6. Other considerations, requests and questions.

1. Session opening

The session was opened by Mr. Héctor Fernando Izquierdo Triana, Secretary of State for Finance and President of the State Agency for Tax Administration, who, after greeting those in attendance and thanking them for their presence, stated that the Administration is aware that small and medium-sized companies are a key economic element, since they represent more than 95% of the Spanish business fabric. It also indicates that it is the will of the Ministry of Finance and Public Administration and the Tax Agency to promote the cooperative relationship model, which is proving to be an effective instrument in the prevention and fight against tax fraud. Mr. Héctor Izquierdo adds that he hopes that, as with other forums already established and which have been operating for more than a decade, the Small and Medium Enterprises Forum will also become an excellent channel of communication based on the principles of transparency and mutual trust and that with the effort and work of all, results will be achieved that will have a positive impact on society as a whole.

The Secretary of State for Finance then gives the floor to Mr. Jesús Gascón Catalán to discuss the objectives that are intended to be achieved with the constitution of this Forum.

Mr. Jesús Gascón begins his presentation by pointing out that the Tax Agency, in line with the OECD initiatives regarding the cooperative model, launched a forum with large companies in 2009 and, later, in 2011, another with the associations and colleges of tax professionals, but that, in recent times, the need to have an analogous framework for relations with small and medium-sized companies has been appreciated. He also said that he wanted to acknowledge the work carried out by the group of professionals who carry out social collaboration functions and who, on a daily basis, report to the Administration various problems that affect SMEs, self-employed workers and people with tax obligations in general. However, Mr. Jesús Gascón comments that the vision of tax professionals does not necessarily always have to coincide with that of the taxpayers they represent, which is why the Tax Agency has considered that the establishment of this Forum perfectly complements the work of the existing ones. The main objective of this Forum is to institutionalize a direct and permanent space for relations, where its members meet periodically and can share different perspectives on issues of interest that arise in relation to the application of the tax system. In addition, the Tax Agency will share, as it does in other forums, its planning and strategic lines for the coming years, explaining the results obtained by the organization. On the other hand, Mr. Jesús Gascón adds that the Forum will also develop its activity through the constitution of working groups, given that, based on the experience demonstrated in other areas of collaboration, they provide greater dynamism to the work, and meetings may be convened as any of the parties deem appropriate. In this regard, he points out that there are two working groups planned: one dedicated specifically to drafting a code of good practices that can be signed by the associations and confederations that represent the group and to which the companies themselves can adhere, and another dedicated to regulatory developments and the digitalisation project. Regarding the first working group, he comments that there is already a Code of Good Tax Practices approved within the framework of the Forum of Large Companies, although it is not limited to these, since any company that wishes to do so can join it. However, this code contains references to issues such as international taxation, which an SME will not, in principle, feel very identified with. It has therefore been deemed appropriate to make the necessary adjustments to existing codes of good tax practice so that they reflect the reality of small and medium-sized enterprises. On the other hand, regarding the second working group, Mr. Jesús Gascón points out that, of course, the digitalization project for the group will be analyzed, but that, in addition, in these times of continuous regulatory changes, the group meetings will be very useful in order to be permanently updated and to know the position and points of view of the members of the Forum on the issues that arise. He adds that the regulatory development of the prohibition of the use of dual-use software is about to be published on the Ministry's website, in order to comply with the public hearing and information procedure, and that both the General Directorate of Taxes and the Tax Agency are interested in receiving the suggestions and observations made from different areas. The Director General of the Tax Agency also comments that this working group will not only have to focus on the short and medium term, but will also have to deal with matters relating to the future of taxation of SMEs. In this regard, he added that the Committee of Experts is expected to present the White Paper on tax reform shortly and that, although the issue of taxation of SMEs and self-employed workers was not expressly included in the request made by the Government, it will be affected in some way, so the meetings of the working group could be used to put the Committee's recommendations into practice and to analyse and discuss possible changes in the short, medium and long term that could be implemented. Finally, Mr. Jesús Gascón indicates that, given that there will be matters of common interest for both SMEs and self-employed workers, the meetings of the working groups may be held jointly for both forums and, if the matter requires it, the participation of representatives of the General Directorate of Taxes or the Institute of Fiscal Studies may be counted on.

2. Round of interventions by representatives of Small and Medium Enterprises

The Secretary of State then gave the floor to the representatives of SMEs.

First to speak was Mr. Luis Aribayos Mínguez, Secretary General of the Spanish Confederation of Small and Medium-sized Enterprises (CEPYME), who, after thanking the Tax Agency for setting up the forum and making himself available to all those present, stressed that at a time like this, when regulatory changes are constant, having a space in which to share and debate issues of interest is tremendously clarifying when it comes to adopting a position. He also points out that CEPYME is committed to the project of digitalisation of SMEs, as they are convinced that electronic invoicing and other digital tools are an effective instrument in the fight against tax fraud and the black economy, but that, nevertheless, they are concerned about how it is going to be implemented and that the different dimensions of companies are taken into account, since it must be taken into account that the Spanish productive fabric is mainly made up of micro-enterprises and self-employed workers. He added that for his association the increase in tax revenues due to an increase in the number of taxpayers is excellent news, that is, lowering the tax burden while the black economy is emerging. He also comments that another issue that worries them is late payment, since, although large companies have immediate solutions at quite low costs through the use of confirming or factoring systems, for an SME resorting to these mechanisms costs a few points of its profit margin. However, he adds that CEPYME would not agree with the creation of a system of sanctions for SMEs that are having particular difficulties in meeting their obligations at a time of economic crisis such as the current one, and believes that a model based on incentives should be used instead. Thus, Mr. Luis Aribayos indicates that the “Create and grow” bill is also being discussed with the Ministry of Economic Affairs and Digital Transformation and reiterates that, as is known by all, the main problems of the Spanish economy are a consequence of the size of the companies that make up the business sector, as indicated in a study they have prepared, which states that taxation would increase by 5 points of GDP just by reaching the European average in terms of company size. For this reason, the organization maintains that it is of great importance that, when legislating, the reality of the productive fabric is kept in mind. Finally, returning to the constitution of the Forum, the representative of CEPYME points out that in his opinion the key will be in the work of the groups, which is where the specific issues of day-to-day life will be analysed and shared, many of which are, in fact, shared with the group of self-employed workers.

Next, Mr. Gregorio Izquierdo, from the Spanish Confederation of Business Organizations (CEOE), took the floor. He first thanked the Secretary of State for his presence at this constitutive act, a clear indicator of the interest of the Ministry of Finance and Public Administration in promoting the model of cooperative relationship with the groups represented by the confederations present. He added that this Forum represents the institutionalization of an existing relationship, which represents a great step forward. He also points out that the fact that the Tax Agency has set itself the promotion of a cooperative relationship with taxpayers as one of its strategic lines, instead of continuing with the controversial approach that was so prevalent in the past, is something very positive for everyone, since, in addition to the degree of tax pressure, SMEs are very concerned about legal security, which, without a doubt, this type of forum helps to increase, both for the taxpayer and for the Administration. On the other hand, he comments that, regarding the issues raised (digitalisation, code of good practices, etc.), they are all current matters and challenges aimed at the modernisation of the Tax Agency and that, although the regulatory competence corresponds to the same, to the extent that the contributions and experiences that the different social agents can make in such complex matters are taken into account, better regulation will be achieved which will result in the achievement of a better tax system for everyone, which, on the other hand, is the wish of all those present.

3. Approval of the Forum's Rules of Operation and Composition of the Technical Secretariat

For the development of this point of the agenda, the Secretary of State for Finance gives the floor to Mr. Jesús Gascón, who informs that the "Rules of operation" of the Forum of Small and Medium Enterprises were sent to its members prior to this call, no observations having been received, and that, if there were none at this time, they would be definitively approved. As no comments were made by those present, the Director General of the Tax Agency declared the “Operating Rules” approved.

Mr. Jesús Gascón then points out that the “Rules of Operation” state that the General Subdirectorate of External Communication will perform the functions of the Forum Secretariat, with the collaboration of a representative of the Federations on a rotating basis for annual periods, to which the representatives of the SMEs respond by designating Mr. Luis Aribayos Mínguez as collaborator of the Technical Secretariat for this first year.

Mr. Jesús Gascón then reports that a space will be created in the electronic headquarters of the Tax Agency within the “Cooperative Relationship” section in which all those issues considered to be of general interest in relation to the Forum will be included (operating rules, working groups, minutes of plenary sessions, etc.).

4. Constitution of working groups

The Secretary of State for Finance reiterates what was commented by Mr. Jesús Gascón regarding the fact that the Rules of Operation in section III state that the activities of the Forum may be developed through the constitution of working groups when so decided by the Plenary, and that other persons whose presence is considered appropriate may attend the meetings of the same (representatives of the General Directorate of Taxes, the Institute of Fiscal Studies, etc.). Mr. Héctor Izquierdo also added that, when issues of interest to the members of the Forum of Federations and Associations of Self-Employed Workers are discussed, the sessions of the working groups of both Forums may be held jointly.

He then gives the floor to the Director General of the Tax Agency to make a brief presentation on this point of the agenda.

Mr. Jesús Gascón points out that in the preparatory meetings prior to the holding of this plenary session, it was noted that it was appropriate to create from the outset the two working groups already mentioned, whose tasks include the following:

Code of Good Tax Practices: Based on existing codes of good practice, they will be adapted to the reality of SMEs, so that the code can be signed by both the entities representing the group and by the SMEs themselves, in line with what was done in the Forum of Associations and Colleges of Tax Professionals, where the professionals who perform social collaboration functions have a Code of Good Practice to which they can adhere.

Regulatory analysis and digitalization project: The idea with this working group is to hold meetings, initially, more frequently in order to address the digitalisation project, since it is imminent that the regulatory development will be submitted for public information and it is a priority for the Tax Agency to have the contributions of the affected groups, especially taking into account that the project is included in Component 27 of the Recovery, Transformation and Resilience Plan and that one of its milestones is the full entry into force of Law 11/2021. Since the ban on the use of dual-use software is one of the most important measures included in the Law, its regulatory development must be approved and in force before July 1. For this reason, the Tax Agency has a special interest in maintaining permanent dialogue throughout the development of the project, so that the final result of the entire process can be foreseen, thereby achieving greater legal security for the affected groups. Furthermore, to the extent that one of the initiatives eligible for European funding is the “Digital Kit” programme, it will be necessary to monitor the incorporation, by the manufacturing and development companies of software , of the technical specifications that are being developed, so that the people purchasing the product have full assurance that they are complying with the standard. On the other hand, as regards the other fundamental content of the working group, other regulatory projects, as well as the new developments related to them, a list must be drawn up distinguishing between the short, medium and long term, so that the group meetings can be organized appropriately, since the issues will be varied and important. For example, we will need to address the issue of indirect charges and formal obligations, sharing proposals that can contribute to their reduction and simplification. In addition, of course, any projects that arise will be brought to the group in order to analyse their consequences from the point of view of applicability.

Since no objections were raised by those present, Mr. Jesús Gascón formally declared the Forum's working groups constituted.

5. Next call: dates and subjects to deal with

In developing this point of the agenda, the Secretary of State for Finance states that this Forum was created with a clear vocation for permanence and that, in order to comment on matters concerning the next ordinary meeting of the plenary session, he gives the floor to the Director General of the Tax Agency.

Mr. Jesús Gascón points out that, in principle, two plenary sessions would be held per year, with the next one scheduled for September, since, regardless of the evolution of the pandemic, the advantage of having a reduced number of participants is that it can surely be held in person. He also reiterated what was already discussed during this session in relation to the fact that the objective of the Forum is to have a permanent channel of communication where issues can be unblocked and progress can be made on them, so that meetings of the working groups would be convened as many times as necessary, as soon as one of the parties deems it appropriate to hold them. On the other hand, the Director General of the Tax Agency indicates that the functions of the Secretariat will be located in the Planning and Institutional Relations Service, headed by Mr. Ignacio Fraisero Aranguren, with the position of Technical Secretary falling to the Deputy Director General of External Communication, Ms. Dolores Carreño Beltrán. He adds that, regardless of the formalities, the representatives of SMEs also have at their disposal Ms. Rosa María Prieto del Rey, Director of the Tax Management Department, Mr. Javier Hurtado Puerta, Director of the Financial and Tax Inspection Department, Mr. Guillermo Barros Gallego, Director of the Collection Department, Mr. José Borja Tomé, Director of the Tax Information Technology Department and, of course, the General Director of the Tax Agency.

The Secretary of State for Finance then takes the floor again and, after making himself available to the Forum, reiterates that the constitution of the Forum seeks to achieve the real establishment of a space for cooperation, so that convening two plenary sessions a year is not to guarantee a minimum functioning of the Forum, but because it becomes a genuine necessity derived from its usefulness for its members. The Working Group also reiterates that the working groups will meet as often as either party deems appropriate.

6. Other considerations, requests and questions

The Secretary of State for Finance then offered the floor to those present and, as no one spoke, he thanked all those present for their presence and closed the first plenary session of the Small and Medium-sized Enterprises Forum, saying goodbye until the next meeting.