The SII and the new information on financial accounts will be key items in the AEAT fight against fraud

Directives of the Annual Tax Control Plan

  • Intensive use of data analysis technology, along with information from the CRS and the Immediate Disclosure of Information along with the consolidation of other sources such as the 720, sets a more difficult scenario for concealment and an easier one for detecting fraudulent behaviour
  • The Tax Agency will develop risk analysis models to optimise information on international groups, which will start being received in June through 'country-by-country reporting'
  • After the first inspections related to the new tool for selecting large portfolios, monitoring and control will be enhanced in 2018 on the basis of more than fifty predefined tax risks
  • The tax control strategy is headed towards improving voluntary compliance, and broadening and consolidating the tax bases declared by taxpayers
  • In the field of tax collection, the Tax Agency will aim for the knock-on effect of voluntary compliance of taxpayers in the medium and long term, and will strengthen the monitoring of major debtors through a permanent and exhaustive asset investigation

23 January 2018.- Two new sources of information, the Immediate Disclosure of Information (hereinafter, 'SII') regarding VAT and the details of financial accounts from dozens of jurisdictions through the OECD's CRS, will be essential pillars in the Tax Agency's fight against fraud as of this year, as detailed in its 2018 Tax Control Plan, the guidelines of which have been published today in the Official State Gazette.

The use of information from SII and the CRS, as well as the consolidation of other sources incorporated in recent years (form 720 on goods and rights abroad, the declared data analysis in form 750 and the FATCA Agreement on Spanish residents with accounts in the United States, among others), contribute to the development of a comprehensive strategy that will give a significant boost to the exploitation of information through the intensive use of data analysis technologies.

The combination of the use of this technology and the new sources of information sets a more difficult scenario for concealment, and an easier one for detecting fraudulent behaviour. In this regard, the Tax Agency's tax control strategy is headed towards improving the voluntary compliance of taxpayers, and broadening and consolidating their declared tax bases.

Large portfolios and activity concealment

The CRS information will be particularly useful for detecting income and assets hidden abroad in large portfolios, the control area in which they have begun related inspections using the new digital taxpayer selection tool, created last year to analyse the real value of high net worth individuals, and to improve the definition of their associated tax risks.

Throughout 2018, monitoring and control will be enhanced on the basis of more than fifty tax risks, predefined using the new selection tool, and focused on cases that show significant traits of concealment or offshoring. The investigation activity will also be essential for detecting income and assets hidden in tax havens or territories with restrictions in the exchange of information, and to locate goods and rights in Spain in cases of simulating tax residence abroad.

In turn, the implementation of the SII will facilitate the control of business and professional activities that are fully or partially concealed. This potential for permanent information on commercial transactions will combine with dynamics and control strategies that are already commonplace in the fight against the informal economy, such as coordinated entry operations and registration with IT auditing units, or the detection of external signs of wealth.

Multinationals and large businesses

From June 2018, the first exchange of information on the essential dimensions of global activity of multinational groups, through country-by-country reporting, will allow for the risk analyses of these large groups to be optimised, with a view to detect, regularise and redirect tax evasion practices.

In parallel, the Tax Agency will continue correcting the evasive practices of multinationals, in accordance with the BEPS risk areas (Base Erosion and Profit Shifting) of the OECD, in matters such as the abusive use of transfer pricing policies (intra-group), or aggressive tax planning structures. This will strengthen the detection and regularisation of permanent establishments belonging to non-resident companies with instrumental operational structures in Spain.

Analysis of new business models

Online research and the acquisition of information related with new models of economic activity continues to be a priority for the Tax Agency, not only with a view to ensure equitable taxation, but also to avoid discriminatory practices in relation to traditional work methods.

In this regard, special attention will be paid to new digital models for service provisions and distribution; the information systems will be adapted, taking into account the rise in payment systems such as electronic wallets and instant transfers, and control will be maintained on manufacturers and online service providers.

As well as the above, other controls that the Tax Agency has traditionally considered priorities will continue to be in place, in fields such as VAT and hydrocarbons, the artificial division of activity, or the use of figureheads and shell companies.

In the case of foreign trade, reassessments will take place regarding the conditions for earning the status as an Authorised Economic Operator, and the authorisations for applying simplified customs procedures, and combined verifications and investigations will be established for imports of consumer products, textile goods, and other items from Asia.

Operations against smuggling and laundering

With respect to combatting smuggling and drug trafficking, materials means and controls in the Straight of Gibraltar will be reinforced, and regulatory measures will be put into place, aimed at limiting the use of high-speed vessels that drug trafficking organisations typically use.

Similarly, the fight will be stepped up against the introduction of narcotics in ports, by organisations that use maritime transport for legal containerised goods. In turn, control across all links in the chain of illegal tobacco trading will also be strengthened, especially the smuggling of cut tobacco leaves, to detect illegal operations and reinforce investigations into criminal networks.

The investigation units of the Tax Agency will foster the use of new tax collection and information analysis technologies of all kinds of open networks, to tackle the potential use of the deep web and cryptocurrencies in organised crime, to traffic and trade all kinds of illegal goods.

Knock-on effect in Tax Collection

In the Tax Collection Department, the Tax Agency will define its activities by searching for the knock-on effect of executive tax collection management, with a view to impact on the voluntary compliance of taxpayers. Additionally, the systematic control of large debtors will be a priority for the Tax Agency in 2018, along with an exhaustive and permanent investigation into their assets.

It also aims to foster the use of information provided by the SII, given that its immediacy allows for both the improved effectiveness of seizures, and their subsequent inspection. Likewise, as in previous years, the Tax Collection Department will encourage precautionary measures, derivations of responsibility and asset investigations, to secure the payment of tax debts, and a permanent control will be maintained to continue reducing the outstanding debt, particularly debt in the seizure phase.