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2022 Report

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:

  • Inspection actions on internal taxes.

  • Management control over the majority of taxpayers and control over taxpayers included in the modular taxation system.

  • 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 2022, almost 1.9 million internal tax control actions were carried out, around 5.2% more than the previous year. Of this total number of checks, 39,366 scheduled actions, 7.6% more than in 2021, were directed at large companies, multinationals and tax groups, personal assets, corporate abuse and the black economy, with these types of actions consuming a large number of resources, also characterised 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 of a verification, investigative or auxiliary nature.

The total amount of debt settled in 2022 amounted to 4,693.32 million euros. This amount includes both debt initiated and settled in the 2022 financial year itself, as well as debt initiated in previous financial years and settled in 2022, but does not include debt initiated in the financial year but contained in minutes that have not been confirmed at the end of the 2022 financial year.

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

  • Control of large estates: Since its creation in 2018, the Central Unit for the Coordination of 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 appropriate investigation and selection mechanisms to detect said risks in specific taxpayers and the promotion of initiatives regarding the effective obtaining and/or management of relevant information. During 2022, work has continued on actions to verify tax contingencies associated with taxpayers who are listed as holders of significant assets. This type of inspection has resulted in debts settled for an amount of 546 million euros in 1,130 cases. These figures are complemented by an analysis of the taxable bases and amounts declared in the Personal Income Tax by taxpayers with significant assets.

  • Actions on the underground economy, focused on:

    • discovery of hidden sales, with more than 2,300 actions in which it has been possible to reveal the existence of sales that the taxpayer had hidden from the tax authorities, and as a result of these, contributions amounting to 435 million euros have been calculated.

    • more than 1,500 entries and records with Computer Audit Units, which, in addition to facilitating the discovery of hidden income by analysing 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. It should be noted that the participation of these specialized units, 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, is 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 personal appearance and with the participation of the Computer Audit Units, and which seek not only to discover hidden sales by the inspected taxpayers, but also to promote voluntary compliance by transmitting a message to the group of business owners in the sector so that they redirect their tax conduct.

  • Actions to exploit international information from DAC1, CRS, DAC2 and FATCA. Specifically, ONIF has continued to work on the exchange of information with other countries and jurisdictions relating to the following categories:

    • information on employment income, director income, pension income, income from life insurance products, as well as ownership and real estate income (OECD and DAC1 income)

    • Information on foreign financial accounts (CRS, FATCA and DAC2)

    • Country-by-Country Reports (CBC and DAC4)

    • Information on consultations and advance tax agreements with cross-border effects and on transfer pricing (DAC3)

  • Actions on small businesses through procedures specialised in the size of the entities and the characteristics of their tax risks, by promoting abbreviated checks.

International taxation

Throughout 2022, the National International Tax Office (ONFI) has contributed, through the development of its important functions, to the general objectives of promoting voluntary compliance and combating international tax fraud and avoidance. The Office's activity has materialized both in actual inspection actions, completing 303 actions, and in the significant assistance of its officials to working groups in international organizations, essential in matters of international taxation, as well as participation in functions of planning and coordination of inspection actions.

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

The ONFI provides support and collaboration in inspection procedures, focusing on complex issues in international taxation. This activity is particularly relevant in the area of inspections of the Central Office of High-Income Taxpayers. In 2022, the ONFI collaborated in 180 inspections, of which 117 have been completed, resulting in adjustments to the tax base estimated at around 3,409 million euros. In the previous year, the company participated in 209 inspections, of which 112 were completed, with a total amount of adjustments to the tax base of 5,578 million euros.

In relation to the APAs (advance agreements for the valuation of related-party transactions), the ONFI's actions, through these advance agreements on transfer pricing, seek to reduce litigation and improve the taxpayer's legal certainty, guaranteeing collection in accordance with the requirements of the law. In 2022, the ONFI participated in the management of 214 APA files, having finalized 43, of which 28 were approved, 6 rejected and in 9 cases the applicants withdrew. The APAs estimated for 2022 have made it possible to guarantee tax bases (generally, in the following four years) for an estimated value of more than 2,712 million euros.

Likewise, last year 2022, the ONFI participated in 638 mutual agreement procedures in direct taxation matters, a figure that has increased significantly in recent years: 371 in 2019, 434 in 2020 and 576 in 2021. In these procedures, the ONFI's actions aim to eliminate the economic double taxation generated by inspection actions and, at the same time, adequately defend the tax bases that must be taxed in Spain, both in regularizations with a cross-border scope carried out by the Spanish Administration, as well as those carried out by the administrations of other countries. Of this total number of procedures, 143 were completed in 2022, compared to 142 in 2021 and 106 in 2020. The tax bases affected by the mutual agreement procedures completed in 2022 amounted to almost 1,004 million euros, this figure being 721 million in 2021.

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 number of administrative control actions on this tax completed in 2022, regardless of the start year and the reference campaign, was 792,992, 7.1% more than in 2021.

In addition, and within the framework of this tax, 197,842 settlements have been made for withholding control, 1.1% less than in 2021.

The results obtained are reflected in Table No. 34. Control actions in the Personal Income Tax (Annex).

Corporation Tax and Value Added Tax

During 2022, the actions completed throughout the year in relation to Corporate Tax reached 54,613 actions (0.7% less than in 2021), and those in relation to Value Added Tax reached 392,146 (3% more than in 2021). To the corporate tax figures we should add 29,807 settlements for split payments (2.4% less than in 2021).

Regarding taxpayers registered in the register of monthly VAT refunds, the actions carried out throughout 2021 have been 7,661 (a decrease of 60.3% compared to 2021).

Actions on taxpayers in Modules

In the case of taxpayers subject to the objective assessment regime, and under the criterion of actions completed in 2022, regardless of the start year and the reference campaign, 25,481 actions have been carried out, 158.3% more than in 2021. This significant increase is due to a change in the configuration of the indicator used for its measurement, which allows the inclusion of actions that, although previously carried out, were not taken into account in the calculation.

The results obtained are shown in Table No. 35. Results in the Module regime (Annex).

Verification of periodic tax returns.

Automated checks are performed on compliance with tax liabilities of periodic self-assessments (Value Added Tax, withholdings and instalment payments) for registered business persons, professionals and withholders.

During 2022, a total of 517,493 letters and requests were issued, in addition to 35,622 hearing procedures and generating a total of 79,827 self-assessments submitted for an amount of 158.6 million euros .

There were also 45,240 settlements for installment payments of Personal Income Tax, Corporate Tax and the simplified VAT regime, for an amount of 51.8 million euros.

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

Census purge. Revocation of NIF

Within the corporate group there is a significant part made up of inactive companies or companies with little or no activity. Often such companies have simply been abandoned by their directors and partners without carrying out the legal acts that the legal system provides for cases of termination, extinction and dissolution of the legal entity.

This type of attitude, which is detrimental to the proper management of the resources that the Tax Agency allocates to control, forces it to serve a group of potential taxpayers that is much larger than those that actually carry out economic activities. Furthermore, it can lead to fraud by using, in one way or another, these apparently inactive companies. Finally, the OECD considers that these inactive legal entities potentially conceal the true ownership of assets and rights, in Spain or in other jurisdictions, and thereby affect the transparency of our system in the knowledge and communication of the Beneficial Owner.

The tax law provides for certain consequences for these behaviors:

  • The closure of the Commercial Registry page is, in addition to the consequence of non-compliance with certain registry obligations, a sanction that derives from the repeated non-compliance with tax obligations that previously determine the removal from the Entity Index. Likewise, registration closure may be a consequence of the revocation of the NIF.

  • The revocation of the NIF, which prevents the continuity of the fiscal life of the company itself.

These measures are intended to ensure that the censuses are properly cleaned up, so that only those companies that really intervene in the commercial or economic sphere maintain their full legal and fiscal life.

In 2022, a special campaign was carried out in relation to inactive entities, which resulted in the revocation of the NIF of 853,934 of them.

Reduction of negative tax bases

In 2022, actions aimed at reducing negative tax bases, deductions and offsets declared by taxpayers reached 3.86 billion euros, compared to more than 4.9 billion in the previous year (8.8 billion in two years), in line with the evolution of other previous years.

Of the result obtained in 2022, 1.93 billion, 50% of the total, corresponds to actions by the Central Delegation of Large Taxpayers.

These actions have a positive impact on gross and net revenue in future years.