Directives of the Annual Tax Control Plan

• Fraud prevention through virtual assistants, a new strategy for taxpayers starting economic activities, and improvements in assistance to the taxpayer are all measures that aim to boost voluntary compliance with tax obligations
• Controlling relevant assets will be reinforced with the new Central Unit for Coordinating the Control of Relevant Assets
• Controlling irregular turnover is a priority; a line of action that will be strengthened with the prohibition of dual-use software
• The use of international information (CRS, country-by-country reporting) will help lead to voluntary compliance and increase the number of actions
• Other priority areas are the risks derived from Brexit, the prevention of smuggling and drug trafficking, with a special focus on the Strait of Gibraltar, and the streamlining of debt collection management

January 17, 2019 .- The promotion of voluntary compliance by taxpayers will be, throughout this year and the following years, a central element of the control activity carried out by the Tax Agency, based on the development of a new strategic planning and a reorganization already initiated of its human resources with the double objective of promoting this voluntary compliance and intensifying actions to combat fraud, covering the largest possible territorial scope.

A basic piece of this focus on strengthening control towards improving compliance, and broadening future tax bases, will be implementing bigger and better controls and analyses of reasons behind inspection regularisations in different records. This will be accompanied by the definitive implementation, in 2019, of a tax risk management tool, which systematises those that already exist in the Tax Agency, creates risk groups and allows for better monitoring of the result of control actions carried out by the Tax Agency.

This is manifested in the 2019 Tax Control Plan, whose general guidelines have been published today in the Official State Bulletin, emphasising that this fiscal year will see the combination of intensive use of Big Data analysis technology and the use of the most recent sources of information (SII, CRS, Fatca, Country-by-Country Reporting -CBC- and, from 2019, information on aggressive tax planning mechanisms, or 'DAC 6') to go deeper into the reinforced control in fields such as large estates, multinationals, the informal economy and fraud in tax collection and customs.

Virtual assistants, already successfully tested for VAT and the Immediate Disclosure of Information (SII) will be boosted and extended to census declarations, within a 'Right from the start' strategy, focused on facilitating voluntary compliance of tax obligations by taxpayers starting economic activities.

With the same aim to drive voluntary compliance, improvements will be introduced in the Income Tax campaign (Renta WEB) to facilitate the declaration of security portfolios, the app introduced in 2018 will be consolidated, and better notifications will be sent to taxpayers on the income they need to declare. In VAT, the transfer of tax data (information from customers and suppliers) to taxpayers not included in the SII will be analysed, to facilitate the filing of tax returns.

The use of technological advances in risk analyses to optimise new sources of international information, such as information on financial accounts abroad or 'Country-by-Country Reporting', which must be filed by multinational groups, will strengthen prevention and increase the number of control activities of people and companies with property and rights abroad or with international activities.

Creation of the Control Unit for Relevant Assets

In particular, control activities will be strengthened around taxpayers with significant assets, with the creation of the control Unit for Coordinating the Control of Relevant Assets.

The aim of this objective is to coordinate and boost the acquisition and organisation of information across the country, for the control, collaboration in developing new IT tools and the proposal, drive and monitoring of new lines of selection of taxpayers with relevant assets and certain tax risk profiles. Special attention will be paid to property and rights abroad, and financial and business networks. 

The control of irregular turnover, connected to the ban on dual-use software that allows for double bookkeeping, will be focused on activities with end consumers with a great risk of fraud, particularly with regard to VAT.

In general, planning control actions is focused not only on regularising breaches detected, but also on leading to the better future behaviour of inspected taxpayers and their environments, and, in general, of economic sectors where there is a significant proportion of inspections. Similarly, there will be a special monitoring of reasons behind regularisation as an essential source of information for planning new control activities.

The suppression of smuggling and drug trafficking will be reinforced by the entry into force of the smuggling regulations to limit the use of high-speed rigid-inflatable boats, often used by drug traffickers.

Abusive use of companies and general control in companies

As with previous years, the interposition of corporate persons to improperly reduce their taxation will be analysed, notwithstanding specific analyses that allow for the detection of other inconsistencies, such as the improper deduction of personal expenses.

Furthermore, as a complement to the actions of controlling large companies, joint actions of Management and Inspection departments will be carried out on small commercial or industrial companies, which up to now have had a low level of priority in tax control, with an objective to improve their tax behaviour.

In particular, actions will be taken on companies whose volumes of activity, profits, sales or expenses are incoherent with what is normal in their sector.

Control actions will also be carried out on tax groups, including those with reduced consolidated turnovers, which are integrated by a small number of companies and do not carry out intra-group transactions.

New business models

An initial study of Fintech technologies to prevent their roll-out from altering the degree of knowledge that the Tax Agency has on the development of economic activities, whilst analysing the possibility to improve the service to taxpayers.

Furthermore, actions will continue to be taken on new distribution models and new activities, such as 'dropshipping', where sales made by one company are delivered by others, and 'store marketplaces' set up on websites.

Logistics activities related to e-commerce will also be looked at. Meanwhile, the analysis and study of new payment methods will continue, to make progress in controls. 

With respect to tax risks observed in transactions with cryptocurrencies, 2019 will see a continuation of the actions started in 2018, based on the information obtained from intermediaries involved in said transactions.

There will also be an analysis and exploitation of third-party information on the ownership and transactions with virtual currencies carried out by resident taxpayers in Spain, in application of new regulations, which are expected to be approved in 2019.

Other activities in the area of internal taxes

In general, controls will be strengthened for accessing the census and updating the census information on developing the 'Right from the start' strategy. Furthermore, controls will continue on economic activities declared for Personal Income Tax, returns on real property with the use of the new informative tax return on tourist leases, withholdings and the abusive use of the regime for non-profit entities.

The process to optimise information provided by SII will be continued, facilitating control actions and operations. Similarly, control actions related to the existence of VAT fraud have continued to be priorities, with the strengthened control of the Intra-Community Operators Registry (ROI) and the sectors and activities of risk.

In the area of Excise Duties, controls will be carried out to verify the correct application of the regulations, the compiling of the census, the origin of refunds and the conditions and requirements to meet for the purposes of validity of the authorisations of establishments subject to Manufacturing Excise Duties, and specific control on the movement and existence of products in factories, bonded warehouses and fiscal warehouses.

Other customs activities

If no agreement is made on Brexit, the necessary adaptations will be made to IT systems to ensure normal customs processing following the withdrawal of the United Kingdom, and information provided to operators will be enhanced.

On the other hand, improvements will continue to be made to the customs advance declaration system, the procedures for re-assessing customs authorisations, and the customs authorisations themselves. There will also be actions to verify goods in customs areas and cash movements made by travellers, as well as a posteriori controls to verify the origin, tariff classification and customs value declared when importing the goods.

Action will also be taken in cases whereby the total or partial concealment of the trade chain is detected, from import until sale to the end consumer. There will be combined verification and investigation activities in cases of consumer products, textiles and other products of Asian origin.

Fight against smuggling, drug trafficking and money laundering

Prevention and suppression activities will be conducted against smuggling, drug trafficking and money laundering as a consequence of such activities, comprehensively acting against the logistical and financial structures of criminal organisations.

When it comes to drug trafficking, the priority areas of control will be cocaine trafficking, and the production of cannabis in underground plantations within Spain. Coordination with Law Enforcement Forces and Agencies will also be increased.

Furthermore, actions aimed at pursuing new trends in illegal maritime trafficking such as 'drop-offs' will be intensified, and a project initiated in 2018 will be boosted to involve all public and private operators in the ports sector.

With respect to the illegal trade of tobacco, controls in the supply chain will be increased, due to the entry into force of the harmonised standard on traceability. Furthermore, risk analysis tools will be leveraged at ports, along with the use of non-intrusive inspection methods to avoid fraud when transporting containers.

Meanwhile, a new maritime intelligence customs strategy will be implemented, along with enhanced risk analysis and investigation related to illegal trafficking that affects global safety, citizen safety or the environment.

To complement the priorities mentioned, in the field of investigating money laundering, controls will be intensified around cash movement in Spanish airports, ports and roads, enhancing the exchange of information, international cooperation and training against organised crime's use of the dark web for trafficking and trading illegal goods, as well as the use of cryptocurrencies as payment methods.

Control in the field of tax collection

Activities will be implemented to prevent the avoidance of debt payments through wealth concealment techniques that create the illusion of insolvency, sometimes through figureheads, the interposition of companies or the concealment of property or rights abroad.

Improvements will also be made to assessing tax collection risk, investigatory actions will be intensified for identifying third parties responsible for debts, cautionary measures will be adopted when there are reasonable indications that the debtor or third parties will hinder or prevent payment, along with the use of all possibilities established by law to levy debts of civil liability and fines charged by the Tax Agency, as well as all debts related to the crime.

Finally, with the integration of the auction procedure in the Portal of the Official State Gazette, the awarding of auctioned property and rights will be managed uniformly, thus optimising the use of resources and subsequently saving costs.

VAT virtual assistant

In 2019, the Tax Agency plans to strengthen the prevention of tax breaches using information and assistance, with a comprehensive strategy to reduce administrative costs and specific projects. This includes the creation of the VAT virtual assistant ('AVIVA'), due to come into place in October, and content updates in the Immediate Supply of Administration (SII) assistant, which, for those not adhered to the SII, may be accompanied by the provision of information on operations declared by those subject to the system.

Meanwhile, for the next Income Tax Campaign, the Tax Agency plans to incorporate a renewed version of the 'securities portfolio' program into Renta Web, which will include the advance completion of information by the Tax Agency itself, facilitating the declaration of share purchases by the taxpayer. A new virtual assistant is also in the pipeline, along with a new form to facilitate the completion of census declarations.