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Report 2019

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 2019, more than 1.66 million internal tax control actions have been carried out, of which the vast majority have been verification actions, 1.61 million. Of this global number of verifications, 29,631 nominal actions were directed at large companies, multinationals and tax groups, assets of natural persons, corporate abuses and the underground economy, these types of actions consuming a high number of resources, also characterized by their high qualification.

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.

These actions may be verification, investigation or auxiliary in nature.

The total amount of debt settled in 2019 amounted to 4,719.05 million euros. This amount includes both debt instructed and settled in the fiscal year 2019 itself, as well as debt instructed in previous years and settled in 2019, not counting, however, the debt instructed in the fiscal year, but contained in minutes that have not been confirmed to date. the end of the 2019 financial year.

Among the actions carried out by the Inspection in the field of internal tax control, the following stand out:

  • Control of large assets: Since its creation in 2018, the Central Coordination Unit for the Control of Relevant Assets (UCCCPR) of the National Fraud Investigation Office, has focused its efforts on the preparation of a complete “census” of taxpayers with high economic capacity, the delimitation of their specific tax risks or frauds, the study and development of the appropriate investigation and selection mechanisms to detect said risks in specific taxpayers and the promotion of initiatives regarding obtaining and/or effective management of relevant information. During 2019, a significant effort has been made in terms of actions to verify tax contingencies associated with taxpayers who appear as holders of relevant assets. The impetus given to this type of inspection verifications has resulted in settled debts amounting to 607.6 million euros in 880 files. These figures are complemented by the analysis of the tax bases and fees declared in personal income tax by taxpayers with relevant assets.

  • Actions on the underground economy, focused on:

    • discovery of hidden sales;

    • entries and records with Computer Audit Units, which, in addition to facilitating the discovery of hidden income through the analysis of dual-use software used in the management and accounting of economic activities, are extremely efficient from the point of view of obtaining evidence and the duration of the checks;

    • coordinated actions, consisting of the simultaneous initiation of verification and investigation actions, through appearance and with the participation of the Internal Audit Units, and which pursue not only the discovery of hidden sales in the inspected tax obligors, but also promote compliance voluntary by transmitting a message to the group of businessmen in the sector so that they redirect their tax behavior.

  • Reduction of negative tax bases, pending deductions and contributions to be offset: During 2019 they amounted to 7.2 billion euros.

  • Actions to exploit international information from DAC1, CRS, DAC2 and FATCA.

  • Checks derived from census purification, which allow induced income, recovery of amounts and embargoes of accounts.

International taxation

Throughout 2019, 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 the APA, the actions of the ONFI 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 an efficient manner. with the lowest possible cost for both the Administration and the taxpayer. During 2019, ONFI has participated in the management of 220 APA files (which is 20% more than the previous year), with 66 having been completed, of which 25 were estimated. These APAs finalized with an estimated agreement imply guaranteeing the future, in terms of the tax base, more than 2,100 million euros.

In turn, last year 2019, ONFI participated in 380 mutual agreement procedures regarding direct taxation, compared to 307 in 2018. In these procedures, the ONFI continues to adequately defend Spanish tax bases - primarily in situations of double taxation - both in regularisations with a cross-border scope carried out by the Spanish Administration, and in those carried out by administrations in other countries. Of these total procedures, 104 were completed, compared to the 50 completed in 2018.

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 2019, ONFI collaborated in 142 inspection checks, of which 76 have been completed, assuming adjustments to the tax base, estimated at around 1,840 million euros. In the previous year, we participated in 161 inspection actions, of which 100 were completed, with a total amount of adjustments to the tax base of more than 3,300 million euros.

The collaboration data for each financial year is subject to high variability, as demonstrated by the historical series, since the tax bases regularized in collaborations depend on many factors, in addition to normally being the result of actions lasting more than a year. Therefore, the mere comparison with the previous year is not significant. In fact, in the same way that in 2019 the regularized bases differed by 1,400 million from those regularized in 2018, those of this last year differ by 1,000 million from those of 2017. The high figure for 2018, which marks a peak in the historical series, includes two specific files with very high regularization figures that are difficult to repeat.

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 about whom exercise their powers (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 2019, have focused fundamentally on the personal income tax returns for the 2017 financial year. Until the date of preparation of this Report, the overall results of the 2017 personal income tax verification campaign have amounted to a total collection of 523.6 million euros and the completion of 534,112 settlements.

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

In addition, the 2018 Personal Income Tax control campaign began, which will extend throughout 2020 and whose data will be offered in the Tax Agency Report for that year.

Starting in 2020, it has been considered that measuring not only the actions carried out with respect to a specific year and started in the previous year, but all those completed in the year considered, regardless of the year, can give a more accurate image of the actions carried out. year of start and of the reference campaign. Based on this new activity indicator, the actions carried out in relation to the Personal Income Tax during 2019 total 725,068 actions, to which 96,836 settlements for control of withholdings should be added (for reference, the 2018 figures based on this indicator there would be 716,478 actions, and 88,563 for withholding control).

Corporation Tax and Value Added Tax

Regarding the Corporate Tax for the year 2017, the verifications started in 2018 and completed in 2019 have involved the practice of 30,595 settlements, for a global amount of 694.569 million euros. With regard to the Value Added Tax corresponding to the 2017 financial year, 117,759 provisional settlements have been made for a global amount of 1,620.625 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.

In these taxes, it has also been considered that, starting in 2020, measuring not only the actions carried out with respect to a specific year and started in the previous year, but also all those completed during the previous year can give a more accurate image of the actions carried out. throughout the entire year considered, regardless of the start year and the reference campaign. Based on this new activity indicator, during 2019 the actions carried out in relation to Corporate Tax have reached 55,079 actions, and those of Value Added Tax have reached 317,079. To the Corporate Tax figures, 24,957 settlements for installment payments should be added. As a reference, the 2018 figures based on this indicator would be 55,395 actions in Corporate Tax and 313,747 in VAT, plus 22,226 for installment payments.

Finally, with regard to taxpayers assigned to the register of monthly VAT refunds, the provisional settlements related to the 2018 financial year, started in that same year and completed in 2019, have amounted to 6,459, for a total amount of 92, 4 million euros.

It has also been considered that, starting in 2020, measuring all those completed throughout the entire year considered can give a more accurate image of the actions carried out, regardless of the start year and the reference campaign. Based on this new activity indicator, during 2019 the actions carried out in relation to taxpayers enrolled in the monthly VAT refund regime have reached 18,067 actions (for reference, the 2018 figure based on this indicator would be 16,016 actions). .

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 Module regime New window (Annex ).

The figures for provisional settlements carried out in the Module regime are included in the total actions carried out in relation to personal income tax.

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 2019, a total of 552,062 letters and requirements were issued, also attending to 42,947 hearing procedures and generating a total of 36,605 induced self-assessments presented for an amount of 65.5 million euros.

There were also 37,499 settlements for installment payments of Personal Income Tax, Corporate Tax and the simplified VAT regime, for an amount of 40.4 million euros.

These figures are part of the total annual settlement figures for each of the taxes referred to.