Operation Chopin

• More than 500 AEAT officials, with the support of police officers, searched 87 premises belonging to 110 companies that own nightclubs and pubs in 11 autonomous communities 

• The searches, carried out between yesterday and today at closing time, involve the start of inspections on all companies and on 14 related individuals.

• The previous investigation had allowed the detection of an abnormally high volume of card payments declared to the Treasury for a sector where cash payments are the most important, which alerted to the existence of a large parallel circuit of cash that is completely undeclared.

• The analysis of the capacity of the premises and the price of tickets and drinks led to confirming serious inconsistencies between the real activity and that declared by the investigated companies.

 

July 8, 2016.- The Tax Agency has launched a major operation against tax fraud in the nightlife sector nationwide which, due to its size and human resources, is considered the largest operation carried out to date by the Agency against the underground economy. The operation, called 'Chopin', involves the start of inspection operations by entering and searching 87 premises in 11 autonomous communities belonging to 110 companies, and also the opening of inspections on 14 individuals linked to these companies.

The entry and search operation in the nightclubs, pubs and offices that were raided has required the deployment of more than 500 officials from the Tax Agency, including inspectors and staff from the Computer Audit and Customs Surveillance Units, with the support of police officers. The searches, which were mostly carried out early in the morning, at closing time, began yesterday and will conclude today, giving way now to the subsequent inspection phase.

The proceedings have been initiated by the Tax Inspectorate appearing at the offices of the taxpayers in order to directly access the actual accounting or auxiliary documentation and information, including the computer systems for processing information, as well as the study of the day's collection and the ordinary operation of the computer systems for issuing tickets, invoicing and cash registers. As this is an administrative procedure, entry and search procedures do not involve arrests.

'Cash' business

The investigation prior to the launch of Operation Chopin began at the beginning of this year with the detection of a volume of card payments declared to the Treasury by the companies now inspected that was abnormally high –up to more than 76% in some cases– for a sector in which, due to its own characteristics, cash payment clearly prevails and the use of credit cards is scarce.

Following this initial tax risk assessment, the Inspection Department detected that all the companies affected by the operation were declaring a volume of credit card payments that doubled the cash movements in bank accounts known to the Tax Agency.

Disappearance of tickets

This situation had already raised the alarm about the possible existence of a large parallel circuit of cash that was not being declared to the Treasury, but the investigators also observed substantial differences between the declared activity and that which was revealed from a detailed analysis of the usual capacity of the premises, the price of tickets and drinks.

Furthermore, prior observation of the premises allowed us to detect in several cases a widespread formal irregularity, which involved the prior sale of tickets for drinks that were subsequently removed at the bar. The ticket was sold to the customer through various means that were not subject to control and the consumption was subsequently left undocumented, taking advantage of the fact that in the leisure sector the recipients of the service are always end consumers.

The weight of the companies inspected

Following this analysis, and coinciding with the start of the high season for nightclubs in the main coastal areas, the entry and registration device was put in place, which has affected 87 nightclubs, pubs and offices of the inspected companies in 11 autonomous communities: Andalusia (10), Aragon (4), Asturias (1), Balearic Islands (4), Canary Islands (4), Castile and Leon (3), Catalonia (16), Extremadura (2), Galicia (16), Madrid (7) and Valencian Community (20).

Given the size of the operation, the resources allocated and the logistical and organisational complexity, this is the largest coordinated operation at a national level against tax fraud and the underground economy carried out to date by the Tax Agency. Together, the companies inspected represent more than 20% of the turnover of the nightlife sector in Spain.

In addition to the detection and subsequent regularisation of tax fraud that eventually comes to light, both this and previous sector-specific actions carried out in recent years by the Tax Agency also aim to convey a dissuasive message to the sectors involved in these practices, so that, where appropriate, they can be redirected towards the correct payment of their tax obligations.

Additionally, these macro operations allow for contrasting the sector's operation with facts and evidence, capturing information, among other concepts, on real ratios of various economic magnitudes, cost structure, cash management, supply channels and payments to professionals and workers.

Operation Chopin has been coordinated by the Tax and Financial Inspection Department of the Tax Agency and is part of the Plan for Control of the Black Economy developed by the Agency. 386 officials from the AEAT Inspection Office, including the Computer Audit Units, as well as 135 Customs Surveillance officials from the Tax Agency, have participated in the entry and registration operation of the last two days, also with the collaboration of the Mossos d'Esquadra in Catalonia, and the National Police in the rest of the national territory.