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Report 2018

4.2.1. Control over internal taxes

The control actions on internal taxes encompass the following actions, excluding those relating to special taxes, environmental taxes and those that fall on foreign trade:

  • Inspection actions on internal taxes.

  • Management control over the generality of taxpayers and control over taxpayers included in the module taxation system.

  • Managerial control over large companies.

    The purpose of inspection control actions is to detect and regularize the most complex non-compliance and prosecute the most sophisticated forms of fraud. Their selective nature makes them fall on taxpayers who present a higher tax risk.

    These actions are carried out by the bodies of the Special Delegations and by the bodies of the Central Delegation of Large Taxpayers that are entrusted with the development of the tax inspection.

    Its implementation has a large investigative component and requires, in general, an exhaustive review of the tax situation of the taxpayer subject to inspection action, for which the bodies that carry them out are equipped with the broadest powers that the regulations attribute to the Tax administration.

    The purpose of management control is to detect and correct less complex errors and non-compliance and is characterized by the fact that it is aimed at the generality of taxpayers on the occasion of annual campaigns, with strong support from the available information and the computer system that analyzes it. It refers to individually considered obligations, is based on formal and documentary controls, without review of the taxpayer's commercial accounting, and is normally carried out from the offices themselves.

    Management control is carried out by the corresponding bodies of the Special Delegations, the Central Delegation of Large Taxpayers and, where appropriate, the National Tax Management Office.

    Along with these controls, the management actions on large companies are computed, which are those whose volume of operations exceeds the figure of 6.01 million euros during the immediately preceding calendar year, calculated in accordance with article 121 of Law 37/1992. , of December 28, of the Value Added Tax, which determines that they have specific tax obligations that are different from the rest of the taxpayers.

    These actions are carried out by the bodies of the Financial and Tax Inspection area, through the Large Company Management Units (UGGES) within the scope of the Special Delegations, as well as by the Management Units and the Tax Control Unit and Customs, integrated respectively into the Tax Assistance and Services Unit and the Tax and Customs Control Unit of the Central Delegation of Large Taxpayers.

    The managerial control actions on large companies are, among others, the verification of the refunds provided for in the tax regulations and the performance of data verification and limited verification actions that may give rise to subsequent settlements.

    Along with the previous verification actions, investigative and auxiliary actions are also included in this indicator.

    In 2018, more than 1.58 million internal tax control actions were carried out, of which the vast majority have been verification actions, 1.53 million. Within these, eight groups of actions are established, among which this year the control of the application of the regulations (864,650 actions), the control of economic activities (525,145 actions) and those carried out on large companies, multinationals, have stood out. and tax groups (18,545 actions).

Inspection activities on domestic tax contributions

These activities comprise all of those carried out by the bodies of the Financial and Tax Inspection division of the Special Delegations and of the Central Delegation of Large Taxpayers, in exercising the administrative functions attributed to the tax inspection by article 141 of the General Taxation Act.

The total amount of debt settled in 2018 amounted to 4,985.30 million euros. This amount includes both debt instructed and settled in the fiscal year 2018 itself, as well as debt instructed in previous years and settled in 2018, not counting, however, the debt instructed in the fiscal year, but contained in minutes that have not been confirmed at the end of the 2018 financial year.

International taxation

Throughout 2018, the National Office of International Taxation (ONFI) has contributed its important role in the fight against international tax fraud and avoidance. The Office's activity has focused both on inspection actions itself, as well as on the relevant assistance of its officials to working groups in international organizations, fundamental in matters of international taxation, as well as participation in inspection action planning functions.

The aforementioned inspection actions include the instruction of prior agreements for the valuation of related-party transactions (APA), the negotiation in mutual agreement procedures regarding direct taxation and support and collaboration actions in inspection procedures, among others.

In relation to APAs, ONFI's actions seek, through these prior agreements on transfer pricing, to reduce litigation and improve the legal security of the taxpayer, guaranteeing collection in accordance with what is required by law.

In turn, last year 2018, ONFI participated in the development of mutual agreement procedures regarding direct taxation. The ONFI's action in these procedures seeks to adequately defend the Spanish tax bases – mainly in situations of double taxation – both in regularizations with cross-border scope carried out by the Spanish Administration, and in those carried out by the administrations of other countries.

The ONFI also supported and collaborated in inspection procedures, focused on complex issues of international taxation. This activity is particularly relevant in the area of inspections of the Central Office of High-Income Taxpayers.

On the other hand, in the field of international taxation, it is also worth highlighting the important results obtained in recent years of actions on entities that operate in the so-called digital economy or in the technology sector.

Checks on these taxpayers have been intensified, with the collaboration of the ONFI and under the protection of the evolution of the regulations resulting from the BEPS project.

Thus, the regularization of tax bases (for IS and IRNR ) has been achieved for an amount of more than 1,500 million euros and quotas above 400 million.

Furthermore, it should be noted that, in the future and as a consequence of these actions, and following, in general terms, the criteria established therein, APAs are established that make it possible to secure tax bases for an estimated amount of more than 500 million euros for the next years.

Manager control over internal taxes

The purpose of management control is to detect and correct less complex errors and non-compliance. 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.

Management control is carried out by the Tax Management bodies; by the Tax Assistance and Services Unit with respect to the taxpayers assigned to the Central Delegation of Large Taxpayers (DCGC); and by the Large Business Management Units, dependent on the Financial and Tax Inspection area, with respect to the taxpayers for whom powers are exercised (among others, those over which the DCGC does not exercise its powers but whose volume of operations exceeds the figure of 6.01 million euros during the immediately preceding calendar year.

Personal Income Tax

The managerial control actions on this tax, in 2018, have focused fundamentally on the Personal Income Tax declarations for the 2016 financial year. Until the date of preparation of this Report, the overall results of the 2016 personal income tax verification campaign have amounted to a total collection of 518.5 million euros and the completion of 507,687 settlements.

The results obtained are reflected in Table 31. Results in the Personal Income Tax New window .

In addition, the 2017 Personal Income Tax control campaign began, which will continue throughout 2019 and whose data will be offered in the Tax Agency's Report for that year.

Corporation Tax and Value Added Tax

Regarding the Corporate Tax for the year 2016, the verifications started in 2017 and completed in 2018 have involved the practice of 32,478 settlements, for a global amount of 973,036 million euros. With regard to the Value Added Tax corresponding to the 2016 financial year, 123,767 provisional settlements have been made for a global amount of 1,690.798 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.

Finally, with regard to taxpayers assigned to the registry of monthly refunds of VAT , the provisional settlements relating to the year 2017, started in that same year and ended in 2018, have increased to 6,379, for a total amount of 119.63 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 indicated in Table 32. Results in the Modules regime New window .

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 2018, a total of 600,987 letters and requirements were issued, also attending to 34,678 hearing procedures and generating a total of 67,372 self-assessments presented for an amount of 52.43 million euros.

There were also 33,532 settlements for installment payments of Personal Income Tax , Corporate Tax and simplified VAT regime , for an amount of 37.2 million euros .