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2018 Report

4.2.2. Customs, excise and environmental control

Inspections on taxes levied on foreign trade operations, special taxes and environmental taxes

This includes inspection activities carried out by the Customs and Excise Inspection departments of the Special Delegations and the Central Delegation for Large Taxpayers, in order to combat fraud that affects both the financial interests of the European Union, that is, its own resources and community aid for the export of agricultural products, as well as internal taxes that tax foreign trade operations and special and environmental taxes.

In 2018, 2,599 settlements were made, with a settled debt of 180.80 million euros.

Special and environmental taxes:

In 2018, the inspections focused mainly on the following areas:

  • Control of fraud due to improper application of exemptions and/or cases of non-taxation provided for in the law, relating to the registration of vehicles and recreational vessels, as well as the control of vessels with non-Spanish registration and control of the tax bases and declared CO2 emissions of all means of transport.

  • Improper use of subsidised diesel, through diversion by the owners of establishments registered in the territorial register of Excise Duties and/or by the end consumers of the subsidies diesel for uses not stipulated in article 54.2 of Act 38/1992, of 28 December, on Excise Duties.

  • Control of the application of reductions in the tax base of the Electricity Tax.

  • Control of manufacturers, importers, intra-community purchasers, waste managers, resellers and certain beneficiaries of exemptions relating to products subject to the Tax on Fluorinated Greenhouse Gases.

  • Control of taxpayers of the Tax on Alcohol and Alcoholic Beverages, owners of vinegar factories, CAE AX.

  • Control of the declaration and payment of the Tax on the Value of Electric Energy Production.

Foreign Trade:

The actions in the field of customs control were addressed to reviewing the elements of taxes levied on foreign trade which cannot be checked at the time of customs clearance.

Fraud in this area has multiple potential variables. On the one hand, there are situations in which the actual price of the goods does not correspond to the commercial documentation presented at the time of customs clearance, with the most affected sectors being textiles, footwear, handbags and leather goods from Asia. There are also cases in which, when there are concepts to include in the customs value, under the concept of adjustments to the price paid or payable, the value has not increased. Finally, the concurrence of circumstances, especially the connection, that prevent the use of the transaction value and force the use of secondary valuation methods.

With regard to the review of the origin of goods and the application of anti-dumping duties, fraud consists of making the connection between the goods and the manufacturer disappear by presenting false or adulterated certificates of origin and invoices, or by making sales - real or fictitious in the real country of origin with other third countries with preferential treatment or without anti-dumping duties, or by incorrectly applying the additional code approved for certain exporters and which entails the payment of an anti-dumping duty lower than the general or of zero amount. Similarly, an anti-dumping duty could be circumvented by applying a lower tariff rate than is actually applicable.

With respect to importing agricultural or fishing products, the tax risks from previous years are generally maintained: undervaluation, incorrect customs classification and false declarations of preferential origin. The experience acquired over time has served to create appropriate risk profiles, which have allowed for detailed monitoring of importing companies or to address, to the extent possible, any fraud situations detected.

As regards the VAT import and control of the application of reduced rates, the objective is to regularize the tax situation of taxpayers who have settled import quotas VAT lower than those that correspond, due to incorrect application of the tax rate.

As for the VAT Regarding imports and exemptions from free circulation, two types of fraud may occur: Release for free circulation in Spain without the goods being sent to another Member State, with fraud in the taxable event of importation of the goods VAT , and release for free circulation in another Member State, with subsequent shipment of the imported goods to Spain without declaration of the taxable event of intra-community acquisition by the Spanish taxpayer (in this case, Mutual Assistance is required). In both cases, the subsequent deliveries of the goods in the Spanish territory of application of the VAT may not be declared in this tax.

Repression of smuggling, money laundering and other frauds

With regard to combating smuggling and money laundering, the Customs Surveillance units carry out operations aimed at repressing smuggling and illegal trafficking of narcotics, tobacco, counterfeited products and other items, as well as money laundering related to these criminal activities, in coordination with other State entities, carrying out their surveillance and control activities at sea, in the air and on land.

The Customs Surveillance Units also carry out control and support activities for the other divisions of the Customs and Excise Duties Department, including preventive checks in customs precincts through non-intrusive inspection techniques, currency controls, and checking the security of the international transportation chain.

They also carry out activities to combat tax fraud and the black market economy, collaborating with other Departments of the Tax Agency, either in the criminal sphere or in administrative channels. The growing complexity of fraud, as well as the internationalisation of its structures, requires external coordination and the need to optimise the Tax Agency's resources through cooperation and collaboration between the different functional divisions.

In 2018, 153,859 kg of hashish, 32,019 kg of cocaine and 9,571,710 packets of tobacco were seized as a result of these actions, representing a total of 120 crimes and 6,802 infractions. In addition, 85 cases of forgery and 2,319 infringements have been reported, as well as 76 cases of money laundering.

The figures on smuggling and on the actions carried out during this year are shown in Table No. 33. Actions to combat smuggling New window and in Table No. 34. Main Customs Surveillance actions New window .

Control in Customs

Today, the actions of customs, apart from ensuring the maximum possible agility in international trade, are aimed at carrying out controls aimed at protecting the financial interests of the EU and its Member States, as well as the protection and security of all citizens of the Union.

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.

Likewise, customs also carry out actions aimed at combating illicit activities that transcend the fiscal sphere, such as, among others, health controls, which affect the control of the quality of products, guaranteeing consumer safety, whose purpose is the protection of intellectual property, the environment or cultural heritage, the control of commercial exchanges with defense and dual-use material, chemical products, substances that can be used as precursors of narcotic drugs and psychotropic substances, as well as such as the control of the violation of trade embargoes imposed by the EU and the United Nations, or controls on species of fauna and flora protected by the CITES Convention .

As an example of the results of these controls, in the case of protected species (CITES Convention ), during 2018, 94,100 grams of live animals (glass elvers) belonging to protected species were seized. In the field of intellectual property protection, in 2018, among other results, 5,203 shipments of merchandise were withheld due to 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 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.

Table No. 35. Results of documentary controls and physical inspections of goods at Customs New window .

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 figure of the authorized economic operator ( AEO ) came into force, a trusted operator who, after fulfilling a series of requirements, may benefit from customs simplifications and security facilitations. Currently, in the EU there are more than 11,000 certified companies and international mutual recognition agreements have been signed with some countries, which not only strengthens the security of the entire logistics chain, but also facilitates trade. 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 recognition agreements for the Authorized Economic Operator regime with Japan, the United States, Switzerland, Norway and the People's Republic of China.

Spain has 869 of these Operators, having granted this status in 2018 to 59 new operators.

In addition, during 2018 a total of 33,283 containers, both import and export, were scanned to verify that the declared cargo matched the radiographic image obtained from the inside of the container and to check for the possible 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.

Data for the years 2017 and 2018 are provided in Table No. 36. Intervening activity of II.EE. New window .