2019 Tax Control Plan

On January 17, 2019, the General Directorate of the State Agency for Tax Administration published the Resolution approving the Annual General Plan for Tax and Customs Control for 2019.

It should be noted that for 2019 the combination of the intensive use of “Big Data” type data analysis technology and the exploitation of the most recent sources of information (SII, CRS, Fatca, “Country by Country Report” c-bc- and, as from 2019, also the information on aggressive tax planning mechanisms, or “DAC 6”) will be particularly relevant in order to strengthen the control of large assets, multinationals, the underground economy and fraud in the collection and customs areas.

In addition, virtual assistants will be promoted in order to facilitate voluntary compliance with tax obligations by taxpayers who are starting up economic activities.

In 2019 the main areas on which the control actions by the Inspectorate will focus are expected to be the following:

• Control of large assets: the Administration will strengthen the control over taxpayers with the creation of the Central Coordination Unit for the Control of Relevant Assets. This Unit has the purpose of controlling assets and rights located abroad, as well as financial and corporate networks. In addition, the detection of irregular invoicing and the prohibition of dual-use software that allows the keeping of two accounts will contribute to this control.

• Abusive use of companies and general control in companies: The interposition of legal entities will continue to be analyzed with the objective of improperly reducing taxation, as well as the improper deduction of personal expenses. Action will also be taken on companies whose volumes of activity, profits, sales or collections are inconsistent with the normal ones in their sector. In addition, control actions will be carried out on tax groups.

• Analysis of new business models: as in previous years, actions will continue to be carried out on new distribution models and new activities. Note that special attention will be paid to logistics activities linked to e-commerce. In addition, control actions will continue with respect to intermediaries in operations carried out with crypto-currency.

• Control in the area of collection: the aim is to develop actions to prevent the evasion of debt payment by means of techniques to conceal assets, creating the appearance of insolvency, sometimes by means of front men, the interposition of entities or the concealment of assets or rights abroad. Finally, as in previous years, investigative actions aimed at identifying third parties responsible for the debts will be intensified, the adoption of precautionary measures will be promoted, and all the possibilities established by the regulations will be used to enforce debts for civil liability and the penalties of fines whose collection is entrusted to the Tax Agency, as well as debts linked to crime.

All this will be reinforced by increased IT tools, both to assist taxpayers in better compliance with reporting and declaration obligations, and to manage information by the Agency itself.