Directives of the Annual Tax Control Plan

• Control over electronic commerce platforms will be tightened in parallel with the implementation in 2021 of the new European VAT rules on the matter.
• Appearances at business premises will continue as an essential element of control, combining the rights of the taxpayer with the powers of the inspector.
• The Collection area will carry out a special control of the 'convenient' ownership of the point of sale terminals to combat the placement of POS in the name of third parties in order to avoid seizures.
• In the field of the fight against drug trafficking and smuggling, artificial intelligence will be promoted for asset analysis and money laundering investigations
• A new computer tool will allow predicting certain errors in the Income Tax return and warn taxpayers who decide to modify certain pre-filled boxes in the draft of these possible errors.

February 1, 2021 .- In 2021, the Tax Agency will promote a specific line to strengthen the control of individuals who appear to be non-residents in Spain. The possibility of enhanced control through massive data analysis tools represents a novelty in the field of 'offshore' relevant assets and marks a new impetus for tax verification of this type of taxpayer.

The project is included in the 2021 Tax Control Plan, the general guidelines of which are published today in the Official State Gazette in a context of relevant regulatory developments. Thus, the tax authorities will manage two new tax figures, the Tax on Certain Digital Services and the Tax on Financial Transactions; Added to this is the foreseeable incorporation of the electronic commerce package ('e-commerce package') with important management innovations in the payment of VAT for electronic commerce platforms.

The guidelines also note that strengthening the prevention and fight against fraud is one of the basic components of the structural reforms supporting the National Recovery, Transformation and Resilience Plan. One of its basic pillars will be the approval of the draft Law on measures to prevent and combat tax fraud published in the Cortes Bulletin on October 23 and its effective implementation from the moment it comes into force.

The impact of the health crisis

Furthermore, the Control Plan guidelines take into account the impact of the health crisis on the Agency's planning in 2020 and, possibly, also 2021. Thus, the consolidation and modulation of lines of action that could have been affected by the pandemic last year is proposed, such as the plan for face-to-face visits.

Priority will also be given to controlling the tax risks of those taxpayers who have been least affected by the economic effects of COVID-19, logically maintaining an adequate general level of control, given the need to combine attention to situations of lack of liquidity with the obligation to check financial years prior to the crisis within the limitation period. Likewise, the increase in negative tax bases pending compensation doubly justifies the continuation of the special plan to review pending bases initiated last year.

The pandemic has also impacted multiple aspects of business operations that the Control Plan guidelines take into consideration. Among them, we can highlight their impact on the transfer prices (intragroup) of multinationals, or the effect that mobility restrictions have had on consumer habits, generating a strong rebound in online commerce. All of this has its implications for tax control purposes, which will be appropriately analyzed by the Tax Agency.

Emergence of 'delocalized' assets

Within the scope of asset analysis, the work of controlling large fortunes promoted by the Central Coordination Unit for the Control of Relevant Assets of the National Fraud Investigation Office will continue, but this year a specific line of control is also being established based on 'big data' tools on taxpayers with significant assets who 'relocate' their residence, pretending to be abroad when the Tax Agency understands that they really reside in Spain.

Over the past year, a systematic analysis of residence was carried out on a large group of taxpayers who appear as non-residents in tax databases. This analysis has facilitated obtaining the necessary evidence to determine the residence in our country of some of these relevant assets, which will allow, starting this year 2021, to intensify the control actions of relocated citizens.

International taxation

In the field of international taxation, the development of the new automated risk analysis system for transfer pricing will be completed this year, an analysis that will also be reinforced by information on potentially aggressive cross-border tax planning mechanisms (Directive 'DAC6').

At the same time, the role of the National Office of International Taxation, ONFI, in promoting inspections will be maintained, and in 2021 a specific campaign will be carried out to verify the proper compliance with the reporting obligations on related-party transactions.

The focus will also remain on identifying structures and patterns of behaviour that unduly benefit from the low taxation of tax havens and preferential regimes, and which can be or are replicated or standardised for use by a plurality of taxpayers.

Combating the underground economy

Within the actions to be carried out within the framework of the fight against the underground economy, and as an essential element of fiscal control, the usual appearances at the business premises of taxpayers will continue to be developed for cases in which the signs of non-compliance are presented with greater clarity, taking into account both the legal and regulatory rules in force, as well as their interpretation by the judicial bodies, and combining in a balanced way the rights of taxpayers with the inspection powers.

Likewise, priority will continue to be given to the use of computer equipment and programs that allow and facilitate the alteration of accounting records of all kinds, and joint work will be proposed with associations of companies specialized in the development or marketing of management software, as a way of preventing the development, dissemination, marketing, downloading or use in the business environment of systems that allow the suppression of sales.

In turn, and in the context of the ongoing dialogue with representative organisations of self-employed workers and SMEs, as provided for in the Agency's Strategic Plan, work will be done to incorporate new groups with economic activity (business or professional) into the plan to send 'calculated economic activity ratios' compared with the ratios that the Agency considers representative of the corresponding sector and economic segment.

On the other hand, the jurisprudential support for the Labor Inspection minutes in which the services provided by supposedly self-employed workers to companies in various sectors are classified as dependent labor benefits, allows the Tax Agency to regularize the different tax contingencies in VAT and personal income tax derived from this review in the declared qualifications.

E-commerce

In relation to online commerce, the Agency will intensify its control, both from the perspective of direct and indirect taxation, carrying out a cooperative approach, where possible, to determine the most appropriate way of accessing the necessary information from e-commerce platforms or, if this is not possible, enforcing the general legally provided information obligations and the penalty regime for non-compliance.

The aim is to ensure the complete tax identification of those taxpayers who, even though they are not domiciled in Spain, carry out the VAT taxable event on their sales to final consumers located in our country.

In parallel with the implementation in 2021 of the regulatory measures derived from the 'e-commerce' package, and to ensure its proper application, the Inspection area will increase control over e-commerce platforms to prevent this type of operations from evading payment of the corresponding tax obligations, in particular, for the purposes of indirect taxation.

In conjunction with this, the abuse of direct postal shipments to the consumer on a non-commercial basis from third countries will be a priority objective in collaboration with the Customs and Excise area, who, in parallel, will promote the use of 'data mining' techniques to complement the traditional analysis and control of foreign trade after import in order to prevent the avoidance of import tariffs and VAT.

Finally, the discussions at EU level on establishing obligations for electronic commerce platforms to obtain and exchange information (future 'DAC 7') must represent a step forward in ensuring that electronic commerce is taxed in accordance with the law and in a similar way to that of conventional commerce.

The efforts to collect, systematize and analyze the information obtained on cryptocurrencies will also continue to be promoted, in order to facilitate control actions regarding the correct taxation of the operations carried out and the knowledge of the funds used in the acquisition of these virtual currencies.

Fight against drug trafficking and smuggling

In the area of the fight against drug trafficking and other illegal activities, the implementation of advanced technologies based on artificial intelligence, big data and data mining will be promoted to reinforce the investigations of the Customs Surveillance Service of the Tax Agency in the areas of asset analysis and money laundering.

At this point, the Campo de Gibraltar area is a priority, where operational actions will be carried out in coordination with the rest of the police and judicial authorities, in application of the Special Plan for Campo de Gibraltar. Operational and maritime surveillance actions that have been reinforced by the legal ban on 'narco-boats' will also continue.

The Central Maritime Intelligence Office for Customs Surveillance, together with its regional structure, will develop new actions to achieve comprehensive knowledge of the port domain and public-private collaboration actions with the different authorities to have greater control over the entry and exit of vessels in the different marinas.

In the area of tobacco, legal measures will be promoted to allow for improved control and surveillance of the circulation and sale of tobacco leaves for illicit purposes and, within the framework of the cooperation instruments agreed with the United Kingdom for application in Gibraltar, efforts will be made to strengthen collaboration with the Gibraltarian authorities in the fight against smuggling.

In turn, Customs Surveillance will continue to give priority to supporting actions to combat the most complex tax fraud in all its phases, especially in the case of actions that require the use of judicial police techniques or powers in support of the ONIF and the Collection Area.

Fraud in the collection phase

Along with the usual priorities in the area of control during the collection phase, such as the monitoring of the assets of debtors convicted of crimes, or the adoption of precautionary measures to avoid the depletion of assets, this year the investigation work that leads to the transfer of liability to third parties will be reinforced with a special control of the 'convenient' ownership of point-of-sale terminals; That is, those cases in which the POS terminals are placed under the ownership of a person other than the debtor, hiding them to avoid seizure actions.

On the other hand, work will continue this year on the implementation of the so-called 'NRC online', a new system for recording and monitoring income managed through collaborating entities that will lead to immediate knowledge of this information, facilitating the tasks of monitoring and controlling debts.

Boost in attendance: predicting errors in the Income Tax Return

In line with the Agency's Strategic Plan to introduce improvements in tax compliance through assistance and prevention, the Annual Control Plan introduces a significant new feature in the area of personal income tax that will likely be implemented in the next Income Tax Campaign: the creation of a tool to predict errors in the declaration and warn the taxpayer about them.

Using machine learning techniques based on regularisations from previous years, the new tool will select taxpayers who may have made mistakes in certain boxes in the section on employment income (in the future the scope could be extended to other sections of the declaration) to warn them of this possible error if they decide to modify the draft offered by the Agency and thus avoid a possible subsequent regularisation.

The Income Tax campaign will also include improvements to the securities portfolio programme and to the amortisation of real estate, while small business owners and professionals will be provided with the automatic transfer of their personal income tax registration books to their tax returns.

Also in the area of assistance, the guidelines of the Control Plan provide for the effective implementation of the Comprehensive Digital Assistance Administrations, the ADI. Following a pilot test carried out in the fourth quarter of last year, the launch of these platforms aimed at providing information and assistance services by electronic means through the use of different virtual communication channels has been consolidated.

Likewise, the scope of the VAT draft will be extended to more groups, the VAT assistants in operation will be reinforced and new census assistance tools will be created, while, in the area of Collection, a telematic assistance system will be promoted. in payment to the taxpayer.

In turn, in order to improve, simplify and modernize information and communication with taxpayers, work is being done to modify the structure of the Tax Agency's website, in such a way that, with a user-oriented approach, the information from the Internet Portal and the processing of the Agency's Electronic Office will be integrated.