Operation 'Mortage'

• More than 300 Agency officials visited 71 premises in 14 autonomous communities yesterday after detecting unjustified external signs of wealth and abnormally low economic ratios in the selected companies.
• The operation has led to the start of inspection actions in relation to 74 companies and 25 related individuals.
• The actions are included in a comprehensive plan for the control of the construction sector, which also includes sending warning letters to other companies and carrying out visits by the Inspection Area.

April 27, 2023 .- The Tax Agency yesterday launched a coordinated operation in 14 Autonomous Communities against tax fraud in the construction materials sales sector. The operation, called 'Argamasa', involves the start of inspections of 74 companies and 25 related individuals (partners, directors and family members), through the presence of more than 300 Agency officials in a total of 71 premises.

The deployed device reaches premises located in Andalusia (8), Aragon (4), Asturias (5), Balearic Islands (3), Canary Islands (4), Cantabria (1), Castilla-La Mancha (1), Castilla y León (6), Catalonia (11), Extremadura (2), Galicia (8), Madrid (9), Murcia (1) and the Valencian Community (8).

Operation 'Argamasa' has been coordinated by the Inspection Department of the Tax Agency, with the participation of more than 280 officials from the Inspection Area, including staff from the Computer Audit Units, and more than twenty officials from the Agency's Customs Surveillance Service, as well as with the support of police officers.

A series of indications of the existence of an underground economy, added to the evolution experienced in recent years in the field of construction and renovation, have led to this sector being set as the target of this operation.

Margins significantly lower than those of its sector

The companies affected by the 'Argamasa' operation are, fundamentally, companies dedicated to the sale of construction materials. The turnover of these companies has increased in recent years, reaching an amount close to 280 million euros in 2021, although they show net margins significantly lower than those of their sector as a whole.

Beyond the sphere of small businesses, which are not the subject of this operation, the construction materials sales sector has special characteristics in terms of its economic operation. This is a sector with little use of card payment (card payment represents less than 8% of turnover).

Although this does not necessarily imply an intensive use of cash, given that this is a sector with a large volume of commercial operations with other businesses, this particularity of the scarce use of card payments, added to the also scarce deposits of cash in accounts (less than 6% of turnover) deserve special attention and a more exhaustive examination of the correct declaration of income.

External signs of wealth

Another element that has been considered in the selection of these companies is the fact that various cases of external signs of wealth have been found in the individuals associated with these companies that could constitute indications of concealing income, such as the rental of safe deposit boxes and the use of high-value personal cards.

By visiting the selected premises, the Agency is able to directly access existing accounting and auxiliary documentation and information, including computer systems for processing information, in order to confirm and quantify the volume of undeclared activity by companies. In some of the appearances carried out yesterday, the existence and use of 'software' for concealing sales or 'dual use' has even been detected. The inspections, which will be carried out in the coming months following this initial collection of evidence, will analyse all the documentation obtained.

Personifications as a tool to combat tax fraud

The experience of previous operations shows that the presence of the Administration in the premises or addresses where the economic activity is carried out, or where the business is managed, allows a more effective fight against the underground economy or any other non-compliance susceptible to regularization.

The Guidelines of the 2023 Control Plan emphasize the need to strengthen the presence of inspectors in the offices where economic activity is effectively carried out in order to reduce irregularities of a purely formal nature, stating that the need to achieve an improvement in the behavior of non-compliant taxpayers will determine that actions can be coordinated at a national level.

In particular, the Guidelines establish that the Tax Agency will maintain, throughout this year, a presence in those sectors and business models in which there is a high risk of the existence of an underground economy, and mention is made in particular of the case of the construction and renovation sector, an area in which this operation is being accompanied by 'warning letters' to other companies, informing them of the convenience of reviewing their declared economic and tax figures, as well as visits ('fiscal combing') for on-site control of formal and registry obligations.

Sectoral macro-operations

With Operation 'Argamasa', the Agency has now carried out 22 coordinated sectoral macro-operations in the last decade. This type of action, in addition to facilitating the detection and regularisation of tax fraud, makes it possible to send a dissuasive message to the groups involved in these practices, which have an impact on public coffers and seriously distort competition in the affected sector itself.