4.1.2. Extensive control

The extensive control has the purpose of detecting and amending errors and more simple tax defaults. It is addressed to verifying in general all the tax debts individually considered, on the basis of the information held by the Tax Agency. It is based, fundamentally, on computer processes and documentary checks (without inspection of the taxpayer's company accounts), usually carried out in its own offices.

Extensive control is carried out by the Tax Management bodies; by the Tax Assistance and Services Unit with regard to taxpayers assigned to the Large Taxpayers Central Office (DCGC); by the Large Company Management Units, which report to the Financial and Tax Inspection division, with regard to taxpayers which falls under their remit (including those which do not fall under the remit of the DCGC but whose trading volume exceeds 6.01 million euros during the immediately previous calendar year); and by the Customs and Excise bodies as for the taxes on foreign trade and the Special Taxes.

Personal Income Tax

The extensive review activities on this tax in 2016 have been essentially focused on Personal Income Tax returns for the 2014 financial year. The results obtained are reflected in the following table in the Annex:

Additionally, the review campaign of Personal Income Tax 2015 began, which will be extended during 2017 and the data of which will be presented in the Tax Agency's Report for that year.

Corporation Tax and Value Added Tax

In 2016, the extensive review activities carried out in relation with Corporation Tax and Value Added Tax have focused essentially on the tax returns for the 2014 fiscal year, both for large corporations and other taxpayers.

With respect to Corporation Tax for 2014, 38,491 payments were made for an overall amount of 306,858 million euros. With respect to Value Added Tax for 2014, 124,571 provisional payments were made for an overall amount of 1,506,401 million euros. This figure includes the results of control actions which result in the settlements previously contracted, reductions in rebates and refunds and negative tax bases.

Lastly, with respect to taxpayers on the monthly VAT refund registry, provisional payments for 2015, originating in that year and ending in 2016, came to 12,611, with a total amount of 246.9 million euros.

Actions on taxpayers in Modules

In the case of taxpayers subject to the objective assessment system, the results of the control actions may give rise to tax inspections and issuance of provisional settlements. The main details are set forth in the annexed table:

Verification of periodic tax returns.

On the basis of the census of employers, professionals and withholders, an automated inspection is performed of compliance with responsibilities of filing of periodical self-assessments (of Value Added Tax and withholdings and split payments).

During 2016 a total of 613,914 letters and notifications have been sent, also attending 32,128 public hearing procedures, generating a total 37,624 self-assessed tax returns for an amount of €32.3 million.

Additionally, 30,142 payments were made by instalments for Personal Income Tax, Corporation Tax and VAT under the simplified regime, for an amount of 28.3 million euros.

Control in Customs

Today, the activity carried out by Customs, apart from ensuring the maximum possible agility in international trade, is also geared towards carrying out controls geared towards the protection of financial interests in the EU and its Member States, as well as the protection and security of all EU citizens.

Activities aimed at combating tax fraud affect two main areas:

• At European Union level, those relating to own capital: customs duties, agricultural duties and sugar prices.
• At domestic level, those affecting indirect taxes: Value Added Tax, Special Taxes and environmental taxes.

Customs also carries out activities geared towards combating illegal activities beyond the tax area, such as, inter alia, healthcare controls concerning product quality in order to safeguard consumer safety, activities relating to protecting intellectual property, the environment and cultural heritage, controlling trading of defence materials and materials with double uses, chemical products, substances that can be used as drug precursors and psychotropic substances, as well as controlling violations of trade embargoes imposed by the EU and the United Nations, or controls over flora and fauna protected by the CITES Convention. During 2016, a new type of control has been established, aimed at solving the problem of illegal tree-felling and trading in order to achieve sustainable forestry management: this refers to the supervision of FLEGT licences established by EC Regulation 2173/2005 of the European Council, of 20 December 2005.

As an example of the results of these controls, with regard to the CITES Convention for protected species: during 2016, 563 live animals and 39,000 grams of live eels were seized, all protected species. In the area of intellectual property protection, 3,793 cases of goods seizures were carried out during 2016 on the grounds of alleged violation of intellectual property rights.

Tax controls are aimed at verifying that items subject to tax and customs duties are correctly declared when going through customs or subsequent checks:

• Identification of goods subject to customs declaration and their proper tariff classification.
• Verification of origin of goods and related certifying documentation.
• Check the taxable bases declared.

Extra-fiscal controls require documentary checks based on verification of certificates and authorisations issued by the competent bodies or a physical check to verify that the goods presented for dispatch from customs match those declared.

Regardless of the declaration procedure used (normal or simplified), the ability to identify legitimate, and therefore low-risk trade, allows the customs authorities to focus their limited resources on those operators who represent a greater risk, thereby facilitating legitimate trading.

It was in this context that the role of the authorised economic operator (AEO) was created. These are trusted operators who, having met a series of requirements, can benefit from customs simplifications and security facilities. Currently in the EU there are more than 11,000 certified companies who have signed agreements of mutual international acknowledgement with certain countries. This not only strengthens the security of the entire logistics chain, but also facilitates trading. In addition, the approach adopted by the World Customs Organisation is being consolidated, which responds to the business community's desire to avoid the proliferation of regulations and to standardise all customs protection procedures. The EU has adopted mutual acknowledgement agreements for the Authorised Economic Operator regime with Japan, the United States, Switzerland, Norway and the People's Republic of China.

Spain has 749 of these Operators, having granted this certification in 2016 to 41 new operators.

Moreover, a total of 32,816 containers were scanned in 2016, going through both customs imports and exports, to check the load declared matched up with the x-ray image obtained of the inside of the container and to check for any possible false walls or hidden compartments. X-ray checks have also continued to be put in place in order to detect possible illegal trafficking of nuclear and radioactive materials, as well as contaminated goods.

Results of documentary checks and physical inspections of goods at Customs:

Special Taxes intervention and management

Inspections of Special Taxes involve both preliminary controls and simultaneous controls when the taxable event takes place. This is because in these cases tax rates are high and exemptions or tax discounts may exist depending on the destination, with non-monetary taxable bases. In the performance of their duties, inspectors draw up a preliminary report to regularise the tax situation of the taxpayers they are reviewing. The preliminary nature of these reports, among other circumstances, is because accounting checks are limited to the records required by Law and the Special Tax Regulations.

The data corresponding to the 2015 and 2016 fiscal years is provided in the following Annex table: