3.1.1. Selective control and investigation

The selective control and investigation activities have the purpose of detecting and regularising the most complex defaults and pursuing the most sophisticated forms of fraud. Their selective nature makes them fall on taxpayers who present a higher fiscal risk, have a large investigative component and entail, in general, a review of the overall tax situation under inspection; for this reason, the bodies that carry them have the fullest powers attributed to the Tax Administration by the regulations.

The selective control activities are performed by the Financial and Tax Inspection bodies, when they refer to internal taxes, and by Customs and Excise Duties bodies with regard to taxes on foreign trade and the Special Taxes.

These activities usually terminate with the corresponding administrative settlements that regularise the taxpayer's situation, or with the submission of a report to the Public Prosecutor's Office when the activities reveal indications of offences against the Public treasury, money laundering or smuggling.

The principal magnitudes resulting from the selective control activities are the following:

^{(*) Amount in millions of euros}

^{(**) Reductions in intensive control}

In addition, in 2013, 578 reports were submitted to the Public Prosecutor's Office for offences against the Public Treasury for an overall amount of 421.91 million euros.

^{(*) Amount in millions of euros}

In 2013, in the field of internal tax contributions, a notable factor was the inspection carried out on the large multinational groups; the sectorial inspection of corporate persons on the basis of a series of preconfigured risks; the control of tax fraud in individuals, using the available models of information capture (electricity supply, collections via credit and debit cards, etc.); the investigation of networks of issuers of false invoices acting under the protection of the specific characteristics of the module system; and the control of correct tax payment by professionals, particularly with regard to the abuse of interposed company structures.

The activities of inspection of refund applications carried out by the Tax Inspection Service are integrated into the general strategy of the Tax Agency aimed at integral control of these applications. The essential goal of this control is to guarantee that refund applications are reviewed correctly, attending to their differing characteristics and risk levels, to avoid the payment of inadmissible refunds. In 2013 a total of 2,936 refund control dossiers were completed, signifying an increase of 11.72% over 2012. As a result of these control activities, refunds have been reduced by an amount of 265 million euros.

Similarly, a programme of in-person activities has been carried out in risk sectors, particularly in relation with the underground economy, with the aim of verifying the correct fulfilment of formal and census obligations. These activities have been addressed to performing a preventive task on tax defaults and, at the same time, acquiring information with the object of detecting possible risk profiles which must be subjected to special monitoring or the performance of other types of control activities of greater intensity, sometimes with the collaboration of the Employment Relations Inspectorate.

Thus, in 2013, 21,741 in-person formal verification activities were completed, 10,270 of them within the Annual Visits Plan. Among them, 6,658 activities were carried out for the inspection of undeclared income, 1,152 inspections of owners' communities, 2,657 inspections of invoicing, means of payment and use of cash, and 1,004 actions of census control.

In addition, the Tax Agency has continued with the strategy directed to the fight against Intra-Community VAT fraud schemes, placing special emphasis on preventive actions for debugging the census of Intra-Community Operators. In this manner, 12,779 control and monitoring documents on the Register of Intra-Community operators and of the Register of Monthly Refunds have been processed.

With regard to abusive tax planning, actions have been performed directed especially at inspecting practices which seek to take undue advantage of taxation differences between countries, irregular use of transfer prices, improper deduction of intragroup financial expenses and early or irregular offsetting negative tax bases generated outside Spain.

During 2013 the Tax Agency continued its inspection actions on operations with high-denomination banknotes (with face value of 500 euros). Similarly, special mention must be made of the control on the entrance into or exit from the country of any means of payment (except nominal cheques) for an amount equal to or more than €10,000 per person and journey, and on movements inside the country of means of payment (except nominal cheques) for an amount equal to or more than €100,000. Likewise, this cash movement research project includes the operations included in the informative statements presented by credit institutions, on an annual basis, regarding impositions, withdrawals of funds, collections and payments, when their amount is greater than 3,000 euros.

In addition, visits have been made to companies to examine their computer systems and, in view of the results, to extract the following information; specifically, 1,223 actions of this kind have been carried out.

In another respect, in 2013, in the field of Special Taxes, the verifications centred on the control of the diversion of gasoil at a reduced rate of the Hydrocarbon Tax and biofuel factories; on the monitoring of newly-created companies which are proprietors of authorised establishments to the effects of the Special Manufacturing Taxes; on the control of the use of alcohol exempt from the Tax on Alcohol and Derivative Beverages in the manufacture of medications; on the intensification of control of electricity-producing establishments and of exemptions and cases of non-subjection to the Special Tax on Certain Means of Transport, in addition to reviewing the declared tax bases; and on the control of VAT fraud deriving from operations with products subject to Special Taxes.

In the field of customs control, these actions have been addressed to reviewing the elements of taxes levied on foreign trade which cannot be checked at the time of customs clearance, such as control of the customs value of the goods; review of the goods' origin and the application of anti-dumping duties; control of the tariff classification of goods; control of the application of reduced rates and of exemption in releases for free circulation, in relation to import VAT; and control of fraud in VAT deriving from foreign trade operations.

With regard to smuggling, the Tax Agency carries out surveillance and control activities in Spain's maritime and air space, in coordination with other State organisations, and particularly in customs enclosures, addressed to the repression and control of the smuggling of narcotics, tobacco, counterfeit articles and other items, in addition to the related money-laundering operations.

As a result of these activities, in 2013, 139,308 kg of hashish, 14,988 kg of cocaine and 10,354,655 packs of tobacco were seized, signifying a total of 2,027 criminal offences and 14,558 cases of smuggling. In addition, 158 intellectual property offences and 136 of money laundering were reported.

Annexes: