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

Extensive control activities on this tax, in 2017, were focused primarily on Personal Income Tax returns from 2015. At the time of writing, the overall results of the 2015 Personal Income Tax verification campaign represented a total tax collection of 491.2 million euros, and 512,562 settlements.

The results obtained are reflected in the following table in the Annex:

Furthermore, the 2016 Personal Income Tax control campaign was started, and will extend into 2018. The information from this will be provided in the Tax Agency Report for said year.

Corporation Tax and Value Added Tax

In 2017, the extensive control activities conducted in relation to Corporation Tax and Value Added Tax were basically focused on tax returns from 2015, both from large companies and all other taxpayers.

With respect to Corporation Tax for 2015, the verifications started in 2016 and finished in 2017 led to 35,619 settlements, for a total amount of 703,808 million euros. As for Value Added Tax for 2015, 128,076 provisional settlements were carried out for a total amount of 1,530.769 million euros. These figures include the results of control actions, the consequence of which are prior contract settlements, deductions on refunds and compensations, and negative gross tax bases. Among other reasons, the improvement of results is down to the strengthened actions for verifying specific tax risks, identified through centralised analysis processes, using new sources of information and technological improvements.

Finally, with respect to taxpayers in the registry of monthly VAT refunds, provisional settlements for 2016, started in said year and finished in 2017, amounted to 8,378, by a total amount of 110.4 million euros.

Actions on taxpayers in Modules

In the case of taxpayers subdued to the objective evaluation system, the results of the control actuations mean the issue of audit reports and the broadcast of provisional settlements. The main data are shown in the following table of the Annex:

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).

A total number of 648,866 demand letters were issued in 2017, along with 35,912 hearing procedures, and generating a total of 42,658 self-assessments filed for an amount of 38.8 million euros.

32,191 settlements were made through instalment payments, for Personal Income Tax, Corporation Tax and the simplified VAT regime, for an amount of 29.4 million euros.

Control in Customs

Today, the activity of customs, as well as ensuring maximum agility in international trade, focuses on executing controls to protect the financial interests of the EU and its member states, and the protection and safety 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, Excise Duties 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.

As an example of the results of these controls, in the control on protected species (CITES Agreement), 1,049 units and 140,352 grams (elvers) of live animals belonging to protected species were intercepted in 2017. Under the scope of defending intellectual property, in 2017, among other results, 4,722 withholdings were made on goods dispatches due to the alleged infringement of intellectual property rights, whereby 87 crimes and 2,999 infractions were processed.

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 control is also supported by filters based on risk analysis, which determines a documentary control based on the verification of certificates and authorisations issued by competent bodies, or a physical control to declare that the goods due to be dispatched coincide with those declared.

These figures are shown in the following table of the Appendix:

From 1 January 2017, with the implementation of the Customs One-Stop Shop (COSS) for imports, the management of the incorporation of certificates authorised by quasi-customs services in the SAD is now carried out when receiving the SAD. As a result, the documentary controls when importing this kind of filter have reduced significantly. This management is still being carried out, but more in line with the recommendations of the Commission, to reserve the orange channel regarding documentary verifications for controls due to customs-related risks. Thus, a new 'yellow' channel has been created, aimed at identifying all operations that must be subject to the presentation of a certain document/certificate or authorisation issued by bodies other than the Tax Agency.

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.

In this context, in 2008, the role of the authorised economic operator (AEO) came into effect, a trusted operator who, after meeting a range of requirements, can benefit from simplified customs procedures and security facilitations. 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 810 such operators, with 61 of these new operators being granted this status in 2017.

Furthermore, during 2017, 28,227 containers were scanned, including both imports and exports, to verify that the declared load coincided with the radiographic imaging obtained inside the container, and checking the potential existence of double bottoms 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.

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 information on 2016 and 2017 can be found in the following table from the Appendix: