Tax Newsletter - January 2020 | Legislation
Approval of the Annual Tax and Customs Control Plan for 2020
The Tax Control Plan for 2020 has been published in Decision of January 21, 2020 by the General Management of the State Tax Agency (AEAT) (Official State Gazette, January 28, 2020 edition). The plan persists with the areas of control in previous years’ plans, although certain action lines and programs are highlighted. Here are the ones we have picked out:
- In relation to information and assistance for the prevention of breaches of tax law, the key initiatives are:
- Creating and strengthening ADI (comprehensive digital assistance) platforms, designed to provide information and assistance services electronically, using virtual communication channels. Those mentioned include the new business taxation status notification assistant or the additional tools designed to ensure correct operation of the Immediate Supply of Information Service’s (SII) virtual assistant or of the VAT virtual assistant –AVIVA-, such as the real estate classifier or assistance with preparing form 303 for lessors.
- Strengthening the tools for analyzing and checking requests for correction of self-assessment returns, notably by adding for 2019 corporate income tax returns the option of making these requests on the self-assessment form.
- Making progress with giving taxpayers access to their tax information. This option will be introduced for the first time for corporate income tax, with information on prepayments, withholdings, amounts carried forward from previous years or penalties and surcharges imposed by AEAT; and for VAT, in this case as part of the PRE-303 assistance service, for preparing form 303.
- Creating and strengthening ADI (comprehensive digital assistance) platforms, designed to provide information and assistance services electronically, using virtual communication channels. Those mentioned include the new business taxation status notification assistant or the additional tools designed to ensure correct operation of the Immediate Supply of Information Service’s (SII) virtual assistant or of the VAT virtual assistant –AVIVA-, such as the real estate classifier or assistance with preparing form 303 for lessors.
- It places particular emphasis on encouraging voluntary compliance with tax obligations and fraud prevention and, among others:
- On cleaning up and analyzing the tax registers, so that only companies and other legal entities that actually carry on activities retain their records statuses for tax law purposes and to ensure that taxpayers file their business taxation status notification forms correctly.
- On encouraging the filing of complete and accurate information by taxpayers, to improve the quality of this information. In the international arena, it recalls that in 2020 the OECD’s Global Forum on Transparency and Exchange of Information will assess Spain, along with the other countries and jurisdictions participating in the automatic exchange of information on financial accounts, in relation to observance of obligations under the Common Reporting Standard -CRS-.
- On compliance in relation to customs and excise and other special taxes. In this area pre-arrival customs processing will be put in place, which will allow the document checks required for pre-customs declarations to be made before the goods arrive, thereby increasing the length of time customs authorities have to analyze them while speeding up processes, especially in relation to movements outside offices’ processing times. Moreover, particular attention will be paid to companies commencing importing activities.
- On cleaning up and analyzing the tax registers, so that only companies and other legal entities that actually carry on activities retain their records statuses for tax law purposes and to ensure that taxpayers file their business taxation status notification forms correctly.
- In relation to audit work on tax and customs fraud, the following is underlined:
- A special audit schedule will be drawn up for taxpayers who have repeatedly reported tax loss carryforwards and unused tax credits on their corporate income tax returns.
- A new computer system will take off, designed to allow representatives and advisors to interact with audits without needing to travel to field tax auditor's place of work (including a video connection).
- A special audit schedule will be drawn up for taxpayers who have repeatedly reported tax loss carryforwards and unused tax credits on their corporate income tax returns.
It also recalls that in 2020 within the European Union an obligation will come into effect to report aggressive planning schemes and other techniques for hiding the ownership of income and assets, arising from the transposition into Spanish law of Council Directive 2011/16/EU of 15 February 2011 (DAC 6), which will mean that steps will be taken in this area.
In relation to multinational groups, large companies and tax groups, the spotlight is placed on:
- Carrying out simultaneous checks and coordinated audits.
- Strengthening mutual agreement procedures and applying the new dispute resolution mechanisms arising from Council Directive (EU) 2017/1852.
- Putting into practice a new automatic transfer pricing risk analysis system based on all the information on controlled transactions that is held by the tax authorities. In this field particular attention will be paid to observance of reporting obligations; without casting aside substantive analysis of transactions, focusing on business restructuring processes, intragroup asset transfers (intangibles, basically) or the deduction of items that erode the tax base (such as royalty payments for licensed intangibles or payments for intragroup services).
In the field of net worth analysis it highlights as an area for particular attention effective implementation of the Common Reporting Standard -CRS- for financial accounts; and underlines (as it did in 2019) the work of the Central Unit for coordinating the Monitoring of High Net-Worth Individuals, created in the National Anti-Fraud Office.
In relation to the hiding of business or professional activities and the fraudulent use of companies, coordinated operations for combatting unreported activities and the underground economy are going to be carried out in conjunction with IT audit units.
In relation to monitoring economic activities, it spotlights
- Monitoring procedures relating to VAT, using the information obtained from the immediate supply of information system (SII). They will look particularly at the retail trade to prevent evasion of the compensatory charge.
- Steps in the field of corporate income tax relating to combatting the underground economy.
It also highlights, among other steps:
- Designing and developing a withholding monitoring tool from the standpoint of the withholding agent, by increasing the contingencies to be checked using the risk management tool, which will enable a comprehensive approach to monitoring personal income tax, starting out from the source of income.
- Steps in relation to nonresident artists and athletes who carry on activities in Spain.
Approval of standard document for substantiating appointment of a representative in the procedure for providing electronic accounting entries on products subject to excise and other special taxes
The January 8, 2020 edition of the Official State Gazette published the decision of December 18, 2019, by the general management of the State Tax Agency, approving the standard document for substantiating the appointment of a representative in the procedure for providing electronic accounting entries on products subject to excise and other special taxes on AEAT's website.
Publication of list of municipalities qualifying for the revised cadaster value multipliers approved for 2020
The December 28, 2019 edition of the Official State Gazette (BOE) published Order HAC/1257/2019 of December 17, 2018, setting out the list of municipalities qualifying for the revised cadaster value multipliers that will be contained in the General State Budget Law for 2020.
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