The Tax Agency will have access to the notaries’ database on real ownership of companies to strengthen the fight against fraud
Agreement between the Tax Agency and the General Council of Notaries
- The information will be updated monthly and will be very useful in the fight against tax fraud generated by the creation of opaque corporate structures.
- The apparent lack of relationship between these types of companies facilitates the creation of false billing or operational networks such as the illegal placement of income in entities without effective taxation, obtaining improper refunds or the concealment of assets.
- In turn, the Agency's access to the Single Computerized Notarial Index is agreed, which will offer information of great relevance for tax control, such as the identification of the persons who, before a notary, grant and receive powers, as well as the dates of appointment and revocation of those powers.
February 5, 2020 .- The Tax Agency and the General Council of Notaries have signed an agreement under which the Agency will be able to access the information contained in the Notaries' Real Ownership Database, information that will be very useful in the fight against tax fraud in relation to the creation of opaque corporate structures for fraudulent purposes.
Likewise, the Agency may also have a periodic supply of information on certain operations or groups of operations contained in the Single Computerized Notarial Index, as well as direct and individualized telematic access to the Single Index, and the possibility of making specific requests for information to the Notary Public is also regulated.
The agreement between the two parties represents a strengthening of the collaboration that the Agency and the Notary have been maintaining based on previous agreements, as well as a significant improvement in obtaining information for the fight against fraud, thus offering benefits that will benefit society as a whole.
The Real Ownership Database
The Agency's systematic access to notary information on beneficial ownership of legal entities will allow for increased control over the corporate structures of supposedly independent entities.
The apparent lack of connection between these types of companies makes it easier for those who control them to create networks of false invoicing or fraudulent operations such as reciprocal invoicing to eliminate group profits, the illicit transfer of income to entities without effective taxation, the obtaining of improper refunds or the concealment of assets.
The agreement also provides that both parties will agree on the manner in which the Agency may obtain, to the extent of the information in the database, the sequence of entities through which a natural person is the legal owner of shares or interests, as well as the actual percentage of his or her participation (based on the successive percentages of indirect participations).
The information supply mechanism must provide for both 'upward' queries (starting from a company, to find out its individual owners) and the reverse ('downward' queries).
The information in the Real Ownership Database, which the Agency considers to be of high quality and useful for the suppression of tax fraud, will be available within two months and will be updated on a monthly basis.
Information on the Notarial Single Index
At the same time, the agreement provides for the provision to the Agency of acts and operations contained in the Single Computerized Notarial Index, which will be provided by computer or telematic means, with a fortnightly update of the information.
In this case, the information it will obtain on acts and operations in which a legal person or a trust participates is of particular importance to the Agency, given the frequency with which corporate operations are carried out with the sole purpose of creating networks of opacity that allow carrying out of fraudulent activities. Analysis of the information contained in the index will enable the Agency to study complex corporate structures using Big Data technology.
In addition, through the Single Index, the Agency will have a periodic supply of the identifying data of principals (the persons who grant power to a third party to act on their behalf), representatives and directors of companies, as well as the dates of appointment and revocation of these powers.
Likewise, access to the index will allow the Agency to obtain information of interest for tax control on financing, real estate, financial asset and other securities transactions, as well as on transactions in which the parties involved before the notary have refused to identify the means of payment used, or have not fully accredited them, or cases in which they have failed to comply with the obligation to provide the notary with the Tax Identification Number, or the 'S-1' document for cash movements when relevant.
Agreement to facilitate procedures for notaries
Furthermore, the General Council of Notaries and the Tax Agency have also signed an agreement establishing a general framework for collaboration on the terms and conditions under which notaries can carry out actions before the Agency on behalf of taxpayers who have worked in their notary's office.
This makes it easier for notaries to submit census declarations that will allow them to obtain a NIF in certain cases, as well as to submit declarations in the area of Inheritance and Gift Tax when taxpayers must pay taxes to the State.