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2019 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 2019, 2,446 settlements were made, with a settled debt of 151.41 million euros.

Special and environmental taxes:

In 2019, the inspections focused mainly on the following areas:

  • Tax on Alcohol and Alcoholic Beverages. The type of fraud that is intended to be detected is mainly the diversion of alcohol or exempt alcoholic beverages, focusing on the figure of the tax warehouse.

  • Hydrocarbon tax. In 2019, inspection activities on companies holding hydrocarbon tax warehouses have been included in the Control Plan as an additional control, with the aim of verifying as far as possible that the movement covered by the circulation documents corresponds to the actual movements of the product.

  • Excises on Certain Means of Transport. 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 tax bases and declared CO2 emissions of all means of transport.

  • Charging tax on tobacco products Tax return-Settlement The ONII (National Office of Inspection and Investigation) has monitored tobacco consumption data, detecting a different evolution in the tobacco used to smoke pipes, which has led to control actions, the majority of which are on shisha, hookah or water pipe smoking.

  • Tax on Fluorinated Greenhouse Gases. 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.

  • Tax on the Value of the Production of Electrical Energy. 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 one 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 for VAT on imports and the control of applying reduced rates, the aim is to regularise the tax situation of taxpayers who have paid inferior VAT amounts upon import to those actually due, due to the incorrect application of the tax rate.

In terms VAT on imports and the exemption on releases into free circulation, there can be two types of fraud: the release into free circulation in Spain without the goods being sent to another member state, with fraud in the taxable event of VAT on imports, and the release into free circulation in another member state, with the subsequent dispatch of the imported goods to Spain, without a 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 goods in Spain subject to VAT may not have declared 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.

Customs Surveillance units also carry out control and support actions for other areas of the Customs and Excise Department, including preventive controls in customs premises using non-intrusive inspection techniques, currency controls, and control of the security of the international transport 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 2019, 109,227 kg of hashish, 26,063 kg of cocaine and 4,805,459 packets of tobacco were seized as a result of these actions, representing a total of 921 crimes and 6,083 infractions. In addition, 118 counterfeiting offences and 2,648 infringements have been reported, as well as 59 money laundering offences.

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 (Annex).

Management 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, Special Taxes 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 case of protected species (CITES Convention), during 2019, 5,349 units were seized, 39,440 grams of elvers, 133,818 grams of coral and 53,399 grams of other species belonging to protected species. In the field of intellectual property protection, in 2019, among other results, 3,654 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 (Annex).

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 949 of these Operators, having granted this status in 2019 to 80 new operators.

In addition, during 2019 a total of 31,209 containers were scanned, both import and export, 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.

Starting in 2020, it has been considered that measuring all the actions carried out throughout the year may provide a more accurate picture of the actions carried out in the area of Customs and Excise management control. Based on this new indicator, it is indicated that the verification actions, control of authorizations and formal obligations, refunds, completion of regimes and review of documents carried out in the field of foreign trade management control during 2019 have reached the figure of 704,799 actions (for reference, the figure in 2018 was 655,659 actions).

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 2018 and 2019 are provided in Table No. 36. Intervention activity of II.EE. (Special Taxes) New window (Annex).

Starting in 2020, it has been considered that measuring all the actions carried out throughout the year may provide a more accurate picture of the actions carried out in the area of Customs and Excise management control. Based on this new indicator, it is indicated that the verification actions, control of authorizations and formal obligations and refunds carried out in the field of management control of special and environmental taxes during 2019 have reached the figure of 467,901 actions (for reference, the figure in 2018 was 630,913 actions).