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2022 Report

4.2.2. Customs, excise and environmental control

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

This includes the 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 the internal taxes that tax foreign trade operations and the Special and Environmental Taxes.

For the inspection activity to be effective, it is necessary to apply risk management techniques to identify the most relevant types of fraud, as well as the application of verification criteria based on the type of fraud, with a global treatment of the taxpayer that takes full advantage of the organizational synergies derived from the control over each tax.

This national research work is the responsibility of the National Investigation Office, which is part of the Customs and Excise Department and is responsible for studying all aspects that affect the fight against tax and customs fraud and, in particular, the analysis of sectors and companies that present a high risk. This National Office works closely with the National Fraud Investigation Office (ONIF) in the criminal investigation of large fraud schemes involving the mass importation, both in Spain and in other Member States, of products from Asia with undervaluation of customs values and concealment of the domestic deliveries actually made. It also centralises and coordinates Mutual Administrative Assistance in customs and excise matters, both with the European Anti-Fraud Office (OLAF), responsible for combating fraud committed to the detriment of the Community budget, and with the Member States of the European Union and with third countries.

In 2022, the Customs and Excise Inspection carried out 7,248 settlements, with a settled debt of 228.66 million euros. The increase in the number of settlements compared to the previous year is due in part to a change in the configuration of the indicator taken as a reference, which allows the inclusion of actions carried out by the control and investigation area that were not previously considered in the calculation. The significant increase in the amount of debt settled compared to 2021 is based on the existence of files with extraordinary results.

Special and environmental taxes:

In 2022, the inspections focused mainly on the following areas:

  • Hydrocarbon tax. In 2022, people with high charges of subsidized diesel between 2018 and 2020 were investigated, without prejudice to the checks that may pose a risk of fraud that are considered appropriate.

  • Special Tax on Certain Means of Transport . This involves controlling fraud in exemptions and cases of non-taxation, controlling vessels flying a non-Spanish flag, and controlling tax bases and declared CO2 emissions.

  • Special Tax on Electricity . This exercise has been double-checked: control of the application of the assumption of non-subjection and the control of electricity consumption in rail transport.

  • Tax on Fluorinated Greenhouse Gases . Control has been carried out mainly on manufacturers, importers, exporters, intra-community purchasers and resellers.

Foreign Trade

These actions focus on inspection control carried out after customs clearance of the elements of taxes that tax foreign trade. In general, for all imports, this control focuses on the customs value, origin and tariff classification of the goods.

With regard to customs value control, fraud in this field has different possible 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, highlighting the risk posed by the growth of electronic commerce, since the existing simplifications for this type of small shipment, as a general rule, can facilitate the declaration of values lower than the actual ones. 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.

As regards the review of the origin of the goods, 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.

Fraud in the tariff classification of goods consists of declaring a heading different from that actually applicable, which will lead to the application of a lower tariff rate than is actually applicable, even evading an anti-dumping duty.

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.

Regarding the actions carried out in 2022, special reference must be made to fraud control in the field of electronic commerce. The existence of two business flows such as B2C and B2B implies the need to act differently given the different characteristics they present. The main characteristic of the B2C business model associated with electronic commerce is the huge volume of small packages with a multitude of recipients, most of whom are not identified by their NIF. The introduction of this type of shipment benefits from simplifications through a reduced declaration of data such as the Low Value declaration or through some simplification in the import declaration. The increase in this type of trade makes it necessary to intensify controls over it, both at the time of dispatch and afterwards. The B2B business model implies that a seller can supply its products to its customers in a short period of time, for which it is necessary that the merchandise is already close to the seller at the time of sale. If the goods originate from a third country, the only way for the seller to shorten delivery times is to import the goods before they are offered through the corresponding online window or Marketplace. The identification of these sellers who market their products through different platforms is not possible without their cooperation. For this reason, the Tax Agency has promoted the signing of agreements with different platforms.

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 for free circulation carried out in Spain for subsequent shipment to another Member State, without such shipment taking place, benefiting from the exemption, and the release for free circulation in another Member State, with subsequent shipment to Spain of the imported goods without declaration by the Spanish taxpayer of the taxable event, intra-Community acquisition or similar operation (in this case mutual assistance is necessary). 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

In the fight against smuggling and money laundering, the Customs Surveillance units carry out actions aimed at suppressing the smuggling and illicit trafficking of narcotics, tobacco, counterfeit products and other items, as well as related money laundering, also including air and naval protection of the border in coordination with other State agencies with a presence at sea.

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 2022, as a result of these actions, 83,099 kg of hashish, 40,022 kg of cocaine and 5,990,239 packets of tobacco were seized, representing a total of 1,065 crimes and 3,062 infractions. In addition, 82 counterfeiting offences and 1,774 infringements have been reported, as well as 83 money laundering offences, with a value of 216.38 million euros.

The figures on smuggling and on the actions carried out during this year are shown in Table No. 36. Actions to combat smuggling and in Table No. 37. Main Customs Surveillance actions (Annex).

Management 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 protection and security. of all citizens of the Union.

In the search for balance between these two legitimate interests, the customs-operator relationship has been evolving. Thus, the development of the Single Customs Window (VUA) has emerged, which allows, among other things, to centralize the information and documentation sent by economic operators to the different authorities related to foreign trade, avoiding duplications and facilitating administrative procedures. This project, in constant development and growth, is currently driven by the Commission's proposal for a Regulation establishing the customs single window environment of the European Union, which proposes that national single windows become a channel communication system in which economic operators can carry out the relevant customs and EU-specific non-customs formalities necessary for the clearance of goods. Thus, economic operators will be able to present in a single point the EU customs and non-customs data required by the multiple authorities involved in the clearance of goods. This facilitation mechanism is the Single Point of Entry (PUE), a functionality in the process of development in the VUA with some of the Inspection Services.

Activities aimed at combating tax fraud affect two main areas:

  • At European Union level, those relating to own capital: customs duties and agricultural duties.

  • 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 go beyond the fiscal sphere, such as, among others, health controls, those that affect the control of the quality of products guaranteeing consumer safety, those aimed at the protection of intellectual property, the environment or cultural heritage, control of trade exchanges with defense and dual-use material, chemical products, substances that can be used as precursors of narcotics and psychotropic substances, as well as controls of 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 2022, 542 units, 1,044 grams of coral, 15,156 grams of caviar and 91,440 grams of other protected species were seized. In the field of intellectual property protection, in 2021, among other results, 2,820 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 customs control affects the application of all European Union rules on prohibitions and restrictions applicable to the entry and exit of goods into the customs territory of the Union. This activity is supported by the establishment of risk analysis criteria, which may determine a documentary control based on the verification of the certificates and authorizations issued by the competent bodies or a physical control to verify that the merchandise presented for clearance coincides with that declared.

Table nº 38. Customs controls on EU prohibitions and restrictions (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, there are more than 22,000 certified companies in the EU 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 acknowledgement agreements for the Authorised Economic Operator regime with Japan, the United States, Switzerland, Norway and the People's Republic of China.

Spain has 1,087 of these Operators, having granted this status in 2022 to 17 new operators.

On July 1, 2021, the so-called “VAT package” came into force, a European regulation that incorporates changes in the taxation of electronic commerce. From that date, small value products that consumers buy online and that are sent from outside the EU become subject to VAT, as has been the case with larger products. From that moment on, the use of the H7 declaration is mandatory, covering goods purchased online that enjoy duty-free treatment because they have an intrinsic value of less than 150 euros, those sent from individual to individual, without payment of any price, which also enjoy duty-free treatment because they have a value of less than 45 euros; and certain documents.

This declaration cannot be used for goods subject to border agency controls because they are subject to specific trade regulations, protected flora and fauna species (CITES), those subject to special taxes or those that require sanitary, veterinary, pharmaceutical or any other control established by current legislation, such as, for example, medicines, tobacco, alcohol, animals and plants, food, weapons and ammunition, etc. In these cases, a complete import SAD must be submitted.

As a result of the controls carried out on these declarations, the issuance of 64,698 declarations has been suspended and their release has not been granted, and for 35,272 declarations, the presentation of a complete import declaration has been requested. The reasons for these decisions include the control of goods subject to prohibitions and restrictions, which has affected 15,695 declarations.

The verification actions carried out throughout the year in the area of foreign trade, the completion of regimes and the review of documents carried out in the field of foreign trade management control during 2022 have reached the figure of 1,044,148 actions. In addition, 652 foreign trade authorisation supervision actions have been carried out.

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.

The data for the years 2021 and 2022 are provided in Table No. 39. Intervention activity of II.EE. (Excise taxes) (Annex).

The verification actions carried out throughout the year in the area of special and environmental taxes in the area of management control of these taxes during 2022 have reached the figure of 636,434 actions.