Annual balance of the results of tax inspections

• Regularisations conducted on large multinational technology companies have led to an increase in the taxable base in Spain of 1.5 billion euros and an income of 400 million, as well as raising its bases for years to come by more than 500 million euros
• Debt amounting to 347.5 million has been paid to individuals with high net worth
• The Tax Agency has obtained 15.089 billion euros through anti-fraud work in 2018, up 2% from the previous year
• Successive campaigns of tax information warnings on rents have increased the number of declarants by 122,000 and have generated an increase in taxable bases of more than 1.3 billion euros
• Almost 3,000 audit actions discovering concealed sales have allowed the regularisation of rates amounting to 719 million euros

August 7, 2019 .- In 2018, the Tax Agency carried out a total of 27,618 nominal control actions on large companies, assets of natural persons, in relation to corporate abuses and the fight against submerged economy. Last year is the first in which the Agency measured its testing activity under a new model that goes beyond the traditional division between intensive and extensive control, placing analysis within the scope of the type of actions. This allows priority to be given to the selection of fiscal risks and the use of one procedure over another (intensive or extensive) according to efficiency criteria.

This change in the measurement model prevents cross-year comparisons in 2018 for each of the new intervention sections. Overall, the Agency conducted 1,531,000 internal tax verification proceedings, 6% more than the previous year, with an additional 45,000 research and ancillary actions added.

Within all of these actions, the ones that particularly stand out are those conducted in relation to large companies, multinationals and tax groups (18,545), asset and corporate analysis (2,418), concealment of activity and abuse of corporate forms (5,005) and, within those aimed at controlling economic activities, those in which concealed sales were discovered (1,650).

Control of large, multinational assets

Parallel to the creation of the new Central Coordination Unit for the Control of Relevant Assets, which from now on will coordinate the analysis and monitoring of the tax behaviour of a group of around 170,000 taxpayers, the Agency closed last year with the assessment of 347.5 million euros for taxpayers with large assets in a total of 494 files, 44% more files than the previous year.

Among the more complex and involved actions are those conducted in the field of international taxation, especially those supported by the Spanish National Office of International Taxation (ONFI). In 2018, ONFI participated in 98 completed audit checks, which resulted in estimated taxable base adjustments of more than 4.2 billion euros, more than double the previous year as a result of the completion of certain particularly high-volume files.

Similarly, ONFI has been involved in the management of 20 Preliminary Valuation Agreements (APAs) with an estimated result guaranteeing future taxable bases of around 2.95 billion euros, more than double the previous year and in line with previous financial years.

Of the actions taken in the area of international taxation, those conducted in relation to large multinationals in the technology sector are particularly noteworthy. By means of a combined action on tax regularisations and future APAs, the Agency has regularised taxable bases in this area, amounting to more than 1.5 billion euros. This has resulted in the assessment of tax rates amounting to 400 million euros and has secured taxable bases for the next few years of an estimated amount of more than 500 million euros. Given their specificity and the small group size, these actions are very difficult to repeat over time.

Results in tax collecting terms

As a result of its work in the prevention and fight against fraud, in 2018 the Tax Agency obtained 15.089 billion euros, up 2% from the previous year. The amount corresponding to the revenue from assessments and tax collection management acts particularly stands out from this overall figure. These are traditionally the core of the Agency's control activity, totalling 8.015 billion euros, 2% more than the previous year. The total figure is completed with the rest of the direct income from control actions, as well as with deduced income, income derived from reductions for refunds and income from taxpayers' extemporaneous self-assessments.

The Tax Agency conducted other important measures, which, while not being calculated in the control results as they do not involve income or reductions for refunds, are of great importance for broadening future taxable bases and raising revenue. These measures include reductions in negative taxable bases, unpaid rate deductions and rates to be offset, with the effect of increasing tax rates by 3.3 billion euros. 35% of this total corresponds to the Large Taxpayers Central Office, compared to 29% the previous year.

Combating the underground economy

Over the past year, the Agency has continued to develop intense control activity to bring to the surface concealed economic activity. In 2018, the Agency conducted nearly 3,000 audit actions under various verification programmes (1,650 in economic activities and the rest in other programmes), in which it discovered concealed sales, regularising rates by an amount of 719 million euros.

The Computer Audit Units (UAI) play a very important role in the fight against the black market economy. In 2018, the UAI participated in 1,915 entries and registers, with computer records facilitating the discovery of concealed rents, allowing improved testing and reducing the duration of checks. This type of action resulted in the regularisation of rates amounting to 326 million euros through 4,689 audit reports (17% more reports than the previous year) for taxpayers who have been the subject of interventions with the UAI in recent financial years.

The activity of the UAI affects actions spread across the national territory, including large macro-transactions coordinated with entries and registers that are being developed in order to discover concealed economic activity and the detection of sales concealment software in specific industries. The deduced effect of these large transactions is seen in the increase in the volume of VAT-declared transactions between 2013 and 2018 (+36%) by the taxpayers concerned, as well as in their VAT rates entered, which have tripled in the same period.

As a complement to the audit procedures, last year the visit plan continued to be developed. 31,095 face-to-face actions (‘searches’) were conducted for on-site control in industries and areas of fiscal risk. More than half of these actions correspond to the VAT Visit Plan (15,707 files, 6.9% more than the previous year). There were also 899 complementary visits for industry-wide entry and register macro-transactions, 15% more than in 2017.

Deduced effect of rent control

The Tax Agency already has the full result of the analysis of the deduced effect that sending tax information notices to alleged lessors during the last Income Tax campaigns has had. In three years, these warnings have led to an increase of more than 122,000 declarants (30% of the total increase in real estate income declarants since 2014), with a higher declared taxable base of 1.346 billion (which would explain the 57% total increase in real estate income for the period).

Revenue generated by derivative liabilities

Within the collection area, and continuing with the boost in the most involved actions to achieve effective collection of tax debts, more than 16,700 derivative liabilities were made, 3.8% more than the previous year. Annually, this type of action results in income from the principal debtor or the person responsible for creating the debt, on a voluntary or executive basis, of more than 400 million euros.

At the same time, in the past year, 351 files (35% more) were processed to ban the availability of property from companies whose stocks or shares have been largely seized due to belonging to a debtor, and there were 905 requests for information or seizure to overseas authorities for the collection of debts, 16.5% more than in 2017. Also noteworthy is the evolution of outstanding debt, which fell by 737 million euros to 41.628 billion euros.