The Tax Agency’s Annual Tax and Customs Control Plan for 2021 includes the main lines of action for preventing and combating fraud to be carried out by the Tax Administration
On 1 February, the Resolution approving the general guidelines of the Tax Agency’s 2021 Tax and Customs Control Plan was published in the Official State Gazette (BOE). In addition to reinforcing the actions developed in previous years, new areas of action have been incorporated. The following is a brief description of the most relevant new actions:
Census Assistant and Activity Finder
The “Census Assistant” help tool has been implemented for the formalisation and presentation of the census declaration. Using the information contained in the Tax Agency’s database and the information provided by the taxpayer, and by means of an intuitive navigation system, the requested procedures are carried out. It has already been used for individuals and will be implemented in 2021 for legal entities.
The Census Assistant is complemented by the Census Informer, a tool for resolving taxpayers’ doubts on census matters.
Another tool called Activity Finder will also be implemented, aimed at providing taxpayers with tax information on an activity (IAE, tax obligations, filing deadlines, etc.) by simply entering the name of the activity.
Tax control relating to tax residence abroad and the use of new technologies
Due to the numerous transfers of Spanish tax residents with high purchasing power, the State Tax Administration Agency devotes an entire section to the control of effective tax residence abroad. In accordance with article 9 of Law 35/2006, of 28 November, on Personal Income Tax, a taxpayerwill be understood to have his or her habitual residence in Spanish territory when any of the following circumstances apply:
- That the taxpayer spends more than 183 days during the calendar year in Spanish territory, with sporadic absences being counted in this calculation, unless the taxpayer can prove their tax residence in another country.
- That the main core or base of his activities or economic interests, directly or indirectly, is located in Spain.
- It will be presumed that the taxpayer’s habitual residence is in Spanish territory when the non-legally separated spouse and their minor children reside in Spain and are dependent on them.
The issue related to tax residence in Spain began to gain prominence in 2009 and 2011, years in which the Supreme Court reaffirmed the criterion of making two taxpayers who allegedly had their tax residence in Andorra, but who had not spent more than 183 days in the territory of Andorra, pay tax in Spain on their worldwide income, and who had not spent more than 183 days in the territory of Andorra, pay tax in Spain on their worldwide income Principality and who had also used their credit cards in Spanish territory.
In the Tax Agency’s databases, taxpayers who change their domicile exclusively for tax reasons would appear as non-residents in a fraudulent manner, a relocation through which they pretend to live in another country, but in fact continue to reside in Spain.
The main novelty consists of reinforcing its work to detect false tax residences abroad through the use of massive data through “big data“.
This regulation proposes that tax inspectors use more than 70 different sources of information in order to determine whether or not a taxpayer who theoretically resides abroad actually resides in Spain. Specifically, the “nudge” system will be used, aimed at encouraging correct tax behaviour based on an understanding of the taxpayer’s behaviour, by means of increased warnings.
In addition, this use ofbig datawill range from the tax risks of the taxpayer, to the characteristics of the place in which, in principle, they reside or their family ties and roots, among other fields. With this, the Treasury will obtain indications that can determine the residence in Spain of these fortunes, either because they spend more than half of the year in Spanish territory, or because they have a relevant centre of economic interest or family relationships.
UK exit from the EU: Prevention of Non-Compliance
Due to the exit of the United Kingdom from the European Union and the trade agreement between the European Union and the United Kingdom from 1 January 2021, the implications for citizens, companies and public administrations will be monitored, mainly in terms of customs control and smuggling.
Verification of Negative Taxable Bases in the IS
Continuing with the special verification plan for 2020, companies will be monitored that repeatedly include in their tax returns negative tax bases to be offset and deductions pending application in their income tax returns. Inactive companies or companies with reduced turnover.
The Management and Inspection areas will increase their checks on companies with reduced net turnover and inactive companies. In the case of inactive legal entities that are potentially concealing the true ownership of assets and rights, consequences such as the closure of the Companies Register and the revocation of the Tax Identification Number (NIF) are envisaged.
Related party transactions and groups
The administration will review the proper compliance with the reporting obligations on related-party transactions to be declared in form 232, the use of legal entities as an instrument for channelling the income of individuals and, with respect to small tax groups, the offsetting of tax losses and compliance with the legal requirements for the integration of entities into the group.
Likewise, the deductions of intra-group financial expenses will be checked, especially when the financing comes from abroad and of interest and dividend payments. In addition, intra-group payments for the transfer of intangibles will also be reviewed.
The actions aimed at verifying the correct application of the VAT equivalence surcharge system initiated in 2020 will continue, paying special attention to suppliers to verify that they pass on the surcharge. Likewise, VAT verification and inspection activities will also continue, in particular: preventive control of the Register of Intra-Community Operators (ROI), control of VAT fraud schemes in intra-Community operations, verification of imports of consumer products, textiles and others of Asian origin, control of tax warehouses and warehouses other than customs warehouses, and control of customs fraud on specific products.
A special control will be carried out on the use of cash, considering that it is often linked to the underground economy, regardless of the quantitative limits in force in accordance with the applicable regulations. In addition, special checks will be carried out on those sectors or activities that have been less affected by COVID-19 or have seen their business grow. Finally, special attention will also be paid to internet sales (e-commerce) and the control of cryptocurrencies.
Inheritance and gift tax control
In addition, on 22 February, the Tax Agency of Catalonia’s Tax Control Plan for 2021, approved by Resolution VEH/435/2021 of 10 February, was published in the Official Journal of the Government of Catalonia. The Plan focuses on Inheritance and Gift Tax (ISD) and Transfer Tax and Stamp Duty (ITPyAJD), in relation to which special attention will be paid to the declared value and, in particular, in relation to the real estate sector.
The Catalan Tax Agency plans, with regard to ISD, to reinforce control of reductions for family relationships and tax benefits for family businesses, and to reinforce control of loans granted by the deceased that could be added to the estate.
Finally, we would like to recall that in 2020 the Administration has started to receive information on certain potentially aggressive cross-border tax planning mechanisms, in accordance with Council Directive (EU) 2018/822 (DAC 6), a system that should be fully operational in 2021.