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The Tax Agency will intensify the control of residents in Spain who artificially reduce their tax bill when declaring the Non-Resident Income Tax

Directives of the Annual Tax Control Plan

  • The new information and assistance model will be implemented, with a complete list of available services and the channels available for each one, together with the new appointment application that improves its usability.
  • The use of 'hair combs' to detect the underground economy will be promoted, especially in the sector of rehabilitation and renovation of properties, as well as for the identification of software for concealing sales.
  • Control over virtual payments through entities or applications based abroad will be strengthened
  • Cryptocurrency research will be boosted to locate assets that may be seized and uncover links to criminal networks
  • New technology will be introduced to monitor vessels engaged in illicit maritime trafficking and detect contraband in postal parcels

February 27, 2023 .- This year, the Tax Agency will promote control over citizens resident in Spain who declare their income through the Non-Resident Income Tax, the IRNR, to artificially reduce their tax bill, given that in addition to having lower tax rates than in IRPF, in this way they only pay taxes in our country on the income generated in it, instead of having to declare all their worldwide income.

The initiative to strengthen control of this variant of the fraud of false non-residents is included in the general guidelines of the Tax Control Plan 2023 published today in the Official State Gazette, which also emphasizes the need to maintain control activity in cases of simulation of residence in CCAA different from the real one, as well as the exploitation of available information on real owners of opaque companies with high-end residential properties. Likewise, specific plans will be implemented in relation to the indirect ownership of real estate by non-residents, for the purposes of correct property taxation.

Promoting voluntary compliance

In addition to the usual development of the priorities that the Tax Agency will have in the new year in terms of tax control, the guidelines of the Control Plan indicate as one of the main novelties for 2023 the implementation of a new information and assistance model in which the majority of services are provided on all channels and the citizen decides how they want to be served, according to the type of service and the resources available.

To this end, a complete list of the services provided by the Agency and the assistance channels available for each of them will be defined. The service letter will be accompanied by a new online appointment application that will use more understandable language and improve its usability.

Work will also be done to enhance and improve face-to-face care for the elderly or people who may be affected by the digital divide.

Within the scope of fraud prevention, the intention to continue reducing the number of non-filers of personal income tax stands out through warning campaigns during the declaration period, or the implementation of early control upon the entry of new taxpayers into the tax register and, in particular, when it concerns entities effectively controlled by taxpayers with reprehensible tax conduct in the past, on whom it is intended to carry out a follow-up to prevent possible future tax non-compliance.

Another of the new features planned for 2023 is the review of sanctioning procedures, especially in those cases of filing self-assessments without income after the deadline, which do not cause economic damage to the tax administration.

Electronic payments and digital economy

Among the tax control priorities included in the 2023 Guidelines is the reinforcement of actions in relation to holders of economic activities that make use of so-called 'virtual payments', and specifically with the use of electronic payment methods located abroad through entities that do not participate in national obligations to provide financial information.

Along these lines, an attempt will be made to obtain information, within the framework of EU regulations, on digital payments made through entities or applications whose headquarters and servers are located abroad.

The guidelines also make special reference to the investigation of the use of virtual currencies, given that, along with the usual mentions of the need to verify their correct taxation, this year the intention of the Tax Collection Area to promote actions to locate cryptoassets that may be seized is underlined.

In turn, the Customs Surveillance Service will develop a research plan associated with the use of cryptocurrencies in the digital economy with the aim of detecting assets whose origin may be linked to criminal activities.

International taxation

The work of the Central Delegation of Large Taxpayers and the various territorial delegations, with the support of the National Office of International Taxation and its design of a '360 strategy' in terms of transfer pricing, has made it possible to intensify in recent years the control over the tax risks that arise from the incorrect setting of prices for related-party transactions in multinationals.

The growing number of inspection actions in this area will be reinforced by the planned boost to joint inspections with other tax authorities and complemented by a search for long-term compliance through the signing of prior assessment agreements.

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

Combating the underground economy

Throughout 2023, the Tax Agency will strengthen its control over sectors and business models in which there is a high risk of the existence of an underground economy. Thus, traditional fiscal visits or 'combing' will be promoted in relation to multiple sectors, although with a special focus on activities related to the construction, rehabilitation and renovation of buildings.

Under the new regulations on the prohibition of sales concealment software, specific plans will also be implemented to identify the management and accounting software tools used by businesses and companies, as well as to verify the consistency of the computer programs with the applicable regulations.

Misuse of tax credits

Along with other preferential attention actions that have been included in the Guidelines of previous years, such as those aimed at avoiding the abusive use of legal personality to channel income and divert expenses from individuals, or those referring to the verification of instrumental entities for the issuance of irregular invoices to be used by operating companies, the Agency will once again focus on the verification of negative tax bases, tax credits in base or quota pending offset or application.

The analysis of structures such as Economic Interest Groups is highlighted in those cases in which they have served as vehicles to transfer and market tax benefits to third-party investors. This analysis and verification will be extended to the participants or partners of the interposed entities and will especially pay attention to the serial sale of these structures for taking advantage of tax benefits, when they deviate from the law, are clearly abusive or are based on simulated or artificially inflated factual budgets.

In any case, the Agency will ensure that the application of the deductions provided for in the Corporate Tax are linked to the development of real activities aimed at the purposes set out in the regulation, as well as that the amounts that have been applied as bases of the deduction correspond to the expenses actually incurred in its execution, avoiding abuse in the possible transfer of tax benefits to the financiers of the activities that the regulation seeks to promote.

New figures

The guidelines also stress that the Tax Agency will be the body responsible for implementing this year the two new temporary taxes on energy and credit institutions and financial credit institutions, as well as the temporary solidarity tax on large fortunes. The Agency will therefore assume the powers of levy, management, verification and collection with respect to these two temporary taxes, despite the fact that they are a non-tax public patrimonial benefit, and will exercise its own powers with respect to the temporary tax on large fortunes.

Joint investigations and the European Public Prosecutor's Office

Both for the VAT fraud area of the National Investigation and Fraud Office, the ONIF, and for the investigations of the most serious frauds in customs matters, all the possibilities offered by the creation of the European Prosecutor's Office, a supranational criminal body, will be promoted. which is representing real progress in carrying out joint research with other countries in the European Union.

Repression of smuggling and drug trafficking

In relation to the prevention and repression of smuggling, drug trafficking and money laundering, during 2023 the Customs Surveillance Service of the Tax Agency will carry out actions aimed at neutralizing organized crime activities, acting in a comprehensive manner against the logistical, financial and asset structures of criminal networks.

In the area of the fight against smuggling and drug trafficking, work will be done on the implementation of new technologies that allow monitoring and detecting anomalous behavior of vessels engaged in illicit maritime trafficking. In turn, operational activity will continue in relation to the supply chain of the 'narco-boats' and, in the case of irregular tobacco trade, progress is expected in the area of prevention based on the development of control regulations on raw tobacco and its sanctioning regime.

In turn, with regard to protection against unfair or illicit trade, the possibilities of applying advanced data analysis tools to the world of detecting contraband in postal parcels will be explored.

Fraud control in the collection phase

Along with the extension of the analysis of collection risks to new asset manifestations, the 2023 Guidelines highlight the importance of strengthening international cooperation for the collection of tax credits through greater exploitation of information exchanges with other administrations and the improvement of tools that allow a selection of debtors with signs of wealth abroad, especially within the EU.

At the same time, permanent priorities are maintained in the area of Collection, such as the adoption of precautionary measures to avoid asset stripping, the adoption of liability transfers to ensure the effective collection of debts, or the monitoring of debtors convicted of crimes, and the use of advanced data processing and analysis tools will also be promoted, especially in the area of large debtors, to quickly and efficiently detect complex collection fraud patterns on which to focus and direct actions.