On May 25, Law 13/2023 (Provision 12204 of BOE No. 124 of 2023) was published in BOE , which modifies the General Tax Law to transpose the EU Directive 2021/514 amending Directive 2011/16/EU on administrative cooperation, establishing the seventh version of the same (better known as DAC7).

The aforementioned Directive introduces a new form of advanced administrative cooperation, understood as cooperation that goes beyond the exchange of documents: the so-called joint inspection, which is incorporated into our legal system through the aforementioned Law 13/2023.

Prior to this regulation, the presence in administrative offices or participation in administrative investigations (known as PAOE) and simultaneous control were already regulated as figures of advanced administrative cooperation. In the General Tax Law they were regulated in articles 177 quater (simultaneous controls) and 177 quinquies (attendances). The aforementioned Law 13/2023 gives new content to the articles and regulates the presences and controls in article 177 quater and the new joint inspection in 177 quinquies .

It is a good opportunity to remember all the existing administrative cooperation figures and the advantages they can bring in the exercise of inspection or control activities in general.

In the first of the figures, the PAOE, an Administration needs information already available or action to be carried out by another Administration in another jurisdiction to obtain information that it cannot, or would take a long time, to obtain adequately with a documentary request. This is a unilateral interest and can be resolved immediately by visiting the offices of another Administration to gather the necessary information or action. It is a figure that can be used with all taxes and even for Collection.

The second of the figures is simultaneous control, already veteran and well-known, widely used in Europe; These are situations in which two or more Administrations have a common or complementary interest in persons or entities. It is developed through control actions carried out by each Administration, which facilitate an exchange of information on their findings and even the discussion on the information obtained and on the consequences derived, always finally substantiated in national procedures and without legal obligation to submit to common conclusions.

As a consequence of this practical reality, a new development in cooperation emerges: joint inspection (Joint Audit). This tool will enter into force at the latest on 1 January 2024 in accordance with the Directive (1 January 2024 in Spain) and does not, in any way, imply the replacement of national procedures. Basically, national inspections continue and are the only ones that can establish a tax debt, although there is progress in terms of the common action that constitutes this joint inspection, which should not be confused with the actual national inspection action. This involves carrying out joint actions, according to a plan or agreement between tax authorities, without establishing a common administrative procedure with interested parties. Some of the powers included in the new regulations already existed in other regulations and were applied in simultaneous presences or controls, but they are included with greater precision in the new regulations:

• It applies to all types of taxes except for VAT , Special Taxes and Customs. Mainly for direct taxation.

• Joint inspections shall be carried out in a previously agreed and coordinated manner, always in accordance with the legislation and procedural requirements of the Member State in which they are carried out at any given time.

• The rights and obligations of officials engaged in activities carried out in another Member State shall be determined in accordance with the legislation of that State. At the same time, they will not exercise any powers that exceed those conferred on them by the legislation of their own State, so there is a double limit to these.

• There is no obligation to a common result once participation is accepted. The authorities will only endeavour to agree on the facts and circumstances relevant to it, as well as to reach an agreement on the tax situation of the person(s) inspected.

• Final report. The findings of the joint inspection will be integrated into a final report. The matters on which the competent authorities reach agreements shall be reflected therein and taken into account in the relevant instruments issued by the competent authorities of the participating Member States following the joint inspection. That is to say, what is agreed in the document must be reflected in the minutes or other documents of the procedure. Additionally, they may include issues on which no agreement has been reached that may not be taken into account in internal procedures.

• Notification. A copy of the final report will be provided to the inspected person(s) within 60 days. Let us remember, regardless of the status of the internal inspection.

The National Office of International Taxation is the inspection body responsible for coordinating this type of action. An official from the office acts as coordinator and liaison with other Administrations, forming part of the AIAC, which is the Community of Advanced Administrative Cooperation, composed of representatives of all Member States. Additionally, by election, he is part of the so-called “coordination group” within it. This group is sponsored by the European Commission and, like all cooperative activities, financed by the FISCALIS budget. Advanced administrative cooperation refers to all instruments and all taxes.

The general guidelines of the Annual Tax and Customs Control Plan for 2023 provide for a boost to this type of action, considered a necessary part of the 360 transfer pricing strategy, stimulating them in three ways: systematic inclusion of an assessment of its use in the initial stages of inspection checks, strengthening of the organization dedicated to its management and coordination and the training of participating actuaries

You can consult the full text of the Law at the following link: Law 13/2023, of May 24 .