4.2.1. Control over internal taxes
Control actions on internal taxes include the following actions, excluding those related to special taxes, environmental taxes and those on foreign trade:
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Inspection actions on internal taxes.
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Management control over the majority of taxpayers and control over taxpayers included in the modular taxation system.
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Managerial control over large companies.
The purpose of inspection control actions is to detect and regularise the most complex breaches and to pursue 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 responsible for carrying out tax inspections.
Its implementation has a large investigative component and generally requires an exhaustive review of the tax situation of the taxpayer subject to inspection, for which the bodies that carry it out are endowed 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-compliances and is characterised by the fact that it is aimed at the general public during annual campaigns, with strong support from the available information and the computer system that analyses it. It refers to obligations considered individually, is based on formal and documentary controls, without reviewing the taxpayer's business 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, 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, on 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 Business Management Units (UGGES) within the scope of the Special Delegations, as well as by the Management Units and the Tax and Customs Control Unit, integrated respectively in the Tax Assistance and Services Unit and in the Tax and Customs Control Unit of the Central Delegation of Large Taxpayers.
The actions of management control over large companies include, among others, the verification of the refunds provided for in tax regulations and the performance of data verification and limited verification actions that may give rise to subsequent liquidations.
Along with the above verification actions, this indicator also includes investigative and auxiliary actions.
In 2018, more than 1.58 million internal tax control actions were carried out, of which the vast majority were verification actions (1.53 million). Within these, eight groups of actions have been established, among which the most notable this year were those for controlling the application of regulations (864,650 actions), those for controlling economic activities (525,145 actions) and those carried out on large companies, multinationals 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 assessed and settled in the 2018 financial year itself, as well as debt assessed in previous years and settled in 2018, but does not include debt assessed in the financial year but contained in reports 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 played its important role in the fight against international tax fraud and avoidance. The Office's activity has focused on both inspection activities and the significant assistance of its officials to working groups in international organizations, which are essential in the field 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 the APAs, the ONFI's actions, through these prior agreements on transfer pricing, seek to reduce litigation and improve the taxpayer's legal security, guaranteeing collection in accordance with the legal requirements.
In turn, last year 2018, ONFI participated in the development of mutual agreement procedures regarding direct taxation. In these proceedings, the ONFI's work seeks to adequately defend Spanish tax bases – mainly in situations of double taxation – both in cross-border regularisations carried out by the Spanish Administration, as well as 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.
In addition, in the field of international taxation, it is also worth highlighting the significant results obtained in recent years in actions on entities operating 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 ) for an amount of more than 1,500 million euros and quotas above 400 million has been achieved.
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 allow tax bases to be secured for an estimated amount of more than 500 million euros for the coming years.
Manager control over internal taxes
The purpose of management control is to detect and correct less complex errors and non-compliances. 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 Department with respect to taxpayers assigned to the Central Delegation for Large Taxpayers (DCGC); and by the Large Business Management Units, dependent on the Financial and Tax Inspection area, with respect to taxpayers over whom their powers are exercised (among others, those over whom 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 management control actions on this tax, in 2018, have focused mainly on the declarations of IRPF of the 2016 fiscal year. As of the date of this report, the overall results of the 2016 IRPF audit campaign have resulted in a total collection of 518.5 million euros and the completion of 507,687 settlements.
The results obtained are reflected in Table No. 31. Personal Income Tax Results New window .
In addition, the 2017 Personal Income Tax control campaign has been launched, which will continue throughout 2019 and whose data will be offered in the Tax Agency's Annual Report for that year.
Corporation Tax and Value Added Tax
Regarding Corporate Tax for the 2016 financial year, the audits initiated in 2017 and completed in 2018 have resulted in the implementation of 32,478 settlements, for a total amount of 973.036 million euros. As regards Value Added Tax for the 2016 financial year, 123,767 provisional settlements have been made for a total 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 No. 32. Results in the Module 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).
In 2018, a total of 600,987 letters and requests were issued, in addition to 34,678 hearing procedures and generating a total of 67,372 self-assessments submitted for an amount of 52.43 million euros.
33,532 settlements were also made for installment payments of Personal Income Tax , Corporate Tax and simplified VAT regime , for an amount of 37.2 million euros .