Communication and Information Technologies

Communication and Information Technology

‰ Information Technology of 13.424 MIPS. The total number of Resources transactions was 4,471,000,000. The most numerous of these inasmuch as centralised The Agency’s HOST units experienced applications are concerned, were those moderate growth, particularly in tape and corresponding to Office, Customs and Human cartridge units (close to 4%). However, the Resources. number of virtual units of this type of equipment grew by more than 150%. On-line storage (GB) rose 119% over the preceding year. - Processing speed continued to rise (46%) compared to the year before to reach a total

TABLE No 84 HARDWARE INSTALLED AS OF 31 DECEMBER 2003

CENTRAL PERIPHERAL TOTAL SERVICES SERVICES Central processing units 456 60 Processing speed (MIPS) 11.393 2.031 13.424 On-line storage (GB) 131.167 6.308 137.475 Tapes/cartridges: real read/write units 100 217 317 Tapes/cartridges: virtual read/write units 320 0 320 TOTAL 142.984 8.612 151.596 Source: Information Technology Department.

The process to improve the connection bandwidth reserved for Internet access from capacity of the Agency’s buildings through its workstations was configured at 8 Mbps. Intranet was concluded in 2003. With regard to collaborations with other The Agency also increased its connection government agencies, the infrastructure for capacity via the Internet. More specifically, a connection to the Government’s Intranet was maximum of 100 Mbps were available for put in place. access to the Virtual Office. Furthermore, the

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TABLE No 85 TELEPROCESSING LINES 2003

TYPE OF LINE NUMBER OF LINES TOTAL RATE (Kbps) POINT-TO-POINT 24 500 X-25 93 1.495 INTERLAN 755 207.600 INTERNET 3 10.000 TOTAL 875 219.595 Source: Information Technology Department.

‰ Computer Applications Internal Tax Management Auditing During 2003 the Agency continued to pursue Support Applications. its objective of fostering relations with taxpayers through the use of new information technologies, especially the Internet. A Virtual 1. Comprehensive Personal Income Office was set up at the Agency’s web page, Tax Management with numerous options to provide taxpayers with the entire range of services offered by In 2003 a draft income tax return for fiscal the Tax Agency. year 2002 was developed and implemented as a pilot test, as foreseen in article 80 of the It also continued with its policy of adapting its Personal Income Tax Act, the implementation applications to the Intranet environment and of which will be mandatory for the 2004 upgrading them to bring them into line with income season (tax return for 2003). legislative changes. Two new information declaration forms have been added to the range of Informative Declarations:

- Form 156, for contributions of taxpayers and insureds for the purposes of maternity deductions which are presented through EDITRAN. - Form 184, for declaring income which can now be filed via the Internet.

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TABLE No 86 INFORMATIVE RETURNS PROCESSED

FORM ITEM RETURNS RECORDS 180 Withholdings on urban property rent 790.218 1.140.725 181 Mortgage loans 413 10.287.370 182 Gifts 6.138 2.190.427 Collective investment institutions (pension 187 486 18.606.790 funds) Withholdings, capitalisation operations and 188 250 1.520.496 insurance 190 Withholdings on personal earnings 1.971.100 50.137.682 192 Treasury bill transactions 90 2.723.787 193 Withholdings on invested capital (explicit) 83.494 28.353.155 194 Withholdings on invested capital (implicit) 183 710.867 196 Withholdings on bank accounts 601 141.525.502 198 Financial instrument transactions 2.228 44.266.744 296 Withholdings on non-resident income 15.846 2.856.903 345 Pension plans and funds 3.055 6.270.581 346 Farm and livestock subsidies 468 2.628.831 347 Transactions with third parties 1.260.989 40.099.247 TOTAL 4.135.559 353.319.107 Source: Information Technology Department.

The tax information sent to taxpayers in 2003 marked the pertinent box on their returns. marked a quantitative leap in terms of the Tax return drafts were sent to all taxpayers amount of fiscal information generated. who requested one. Besides the usual channels, this year there was an option for incorporating the data In all, 3,522,914 certificates were sent out. into the PADRE program directly, either via The most innovative feature of the letters sent the Internet with an electronic certificate or out this year is that they were sent in both via the Intranet (by Tax Agency civil servants languages to all taxpayers in the autonomous for taxpayers with appointments). In addition communities of Cataluña, Galicia and to the information provided the year before, in Valencia. Taxpayers also had the option of 2003 the Tax Agency offered information on requesting a certificate in Catalán via VRU or the assessment of urban real property Internet (a total of 2143 people requested (provided by the Directorate General of the this service). Cadastre).

In 2003, the Tax Agency sent certificates of earnings and taxes out to all taxpayers who

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2. Advance Payment of Maternity - Approval of Royal Decree 1041/2003 of 1 Deductions (DAMA Project) August regulating certain tax census and other regulations governing the Economic The implementation of this advance payment Activity Tax. programme required the collaboration of - Approval of the HAC/2567/2003 Order of organizations external to the Tax Agency 10 September which approved the new which provide the necessary monthly Census Form 036 for professionals and self- information on the new Form 185. This allows employed. the payments to be made in a controlled - Regulatory changes to the Economic manner without having to bother the recipient Activity Tax. taxpayers (INE, TGSS, INSS, MUFACE, MUGEJU, ISFAS, alternative insurers). 4. - Centralised Refund Management System. Taxpayers were offered a number of different channels for filing their applications: form Procedures were developed to automate the 140; confirmation of the personalized discounts issued to public creditors for invitation letter; in person at a Tax Agency refunds agreed by the Tax Agency and its office; by Internet or by telephone. For the debtors. These public creditors are public first time this year, using a security protocol, entities other than the Tax Agency with the the form could be filed by telephone power to issue attachment orders affecting (incorporating the telephone conversations the refunds acknowledged by the Tax Agency into a database that can be consulted from as being payable to taxpayers. They include our offices). Social Security, the courts, autonomous communities, local governments, etc. 3. Maintenance and Purging of the Census 5. Personnel Management

In 2003, diverse applications were developed A System for the Integral Management of and implemented to maintain the census of Notices was developed and implemented to taxpayers as a consequence of the following support new notification attempts, procedural or regulatory changes: notifications through official gazettes, - Enactment of the Resolution of 23 October automatic verification of notices and 2002 of the Directorate Generate of the Tax electronic notices sent to e-mail addresses, Agency which approved Form 030 which can as well as centralised generation of PDF be used by individual taxpayers to notify a images of the notices and correspondence change of address or change of personal or delivered to taxpayers. family circumstances. - Changes to the 2002 Income Tax 6. Fees for the exercise of procedure which made it possible to jurisdictional authority in civil and automatically update tax addresses right on contentious-administrative orders the Rapid Refund Form (104) or Income Tax Form (100) using the Help programmes. (court fees) - Internet connection of CIRCE and the Tax Agency for the assignment of temporary and In 2003, the Tax Agency developed an definitive fiscal identification numbers to new automated procedure for the electronic limited liability companies created through presentation and consultation via the Internet this organization. (Law 7/2003 of 1 April on of form 696 for the self-assessment of fees New Limited Liability Companies). for the exercise of jurisdictional authority in

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civil and contentious-administrative orders. as the filing of the new form 840 by Internet.

Using this electronic procedure, the Court Integrated Collection System Secretary can immediately send the required data over the Internet to the Tax Agency Several main lines of work were pursued in using the application developed for this the Integrated Collection System in fiscal purpose and available on the website 2003: www.agenciatributaria.es. - Development and implementation of new 7. Accounting Information Module consolidated databases applications with the necessary adaptations of provincial To prepare for the elimination of the Agency’s databases. cash windows at the beginning of 2004, - Creation of new tools for the management significant changes were made in 2003 to the of the collection procedures defined in the collection procedures of the collaborating Standarised Collection Method. entities to enable them to collect the - Consolidation of data in the database. revenues which could formerly only be paid at - Adaptation of all applications affected by an Agency cash window. the elimination of cash windows from agency New channels of communication were also offices. opened up with the Tax Agency’s General Auditing for the daily transfer of the revenues 1. Management of due dates collected by the collaborating entities to the Treasury. A new application was implemented for the management of collection due dates, from the 8. Other Developments voluntary period through the attachment order, using the computer tool Infoclase. This The other developments worthy of note are application is part of the Standardised as follows: Collection Method.

- Development and implementation in the The implementation of this new procedure consolidated database of the procedures enables the different players involved in the necessary to process notices of missing collection process to have access to and documentation. manage all of the information on the due dates using this tool, regardless of the office - In the management of corporate income where they are actually located. The tax for companies who file consolidated information can be consulted and manager by income tax returns (models 220), a new units, subunits and actuaries. application was developed and added to the consolidated database for managing these 2. Attachments returns starting with the year 2002 and thereafter. Arrangements have been made with collaborating entities to make it possible to - New mechanisms were added for entering use deposit form 008 without a specified data in the Consolidated Data Entry System. amount to expedite the process of seizing different types of property. - Local tax applications were adapted to the regulations governing the management A new application has also been introduced system of the Economic Activity Tax as well into the consolidated database which will

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make it possible to reflect in the system all of 6. Assignment to Actuary the actions needed to seize movable goods, obtaining all of the necessary products, for A new centralized option was added which both the internal management of the makes it possible to assign a debtor to an procedure and for communications with the actuary in a unit or subunit. Movable Goods Register. 7. Integral Consultation 3. Disposal of Property The new consultation option for the The pertinent applications have been Integrated Collection System in the implemented in the consolidated database, consolidated database is now up and Intranet and Internet to enable the disposal of running, which provides all of the centralised movable goods and the participation of data in this information system. Internet users in these procedures. 8. Income. 4. Deferrals / Partial payments A new database procedure was developed A new service was implemented for notifying for entering income from collaborating entities taxpayers by mobile telephone or by e-mail of into Integrated Collection System. the receipt of deferral requests through the Call-in Assistance and of the concession of the referrals requested. 9. Statistical and Accounting Applications. 5. Guarantees The following procedures were implemented: Work also concluded on a new database application to administer the guarantees - Generation of accounting records from the presented in connection with postponements consolidated database on bond type or appeals against assessments or other guarantees and mortgages. types of collection proceedings, obtaining all - Generation of balance of external debt as of the products necessary to process each of 31 December each year. type of guarantee. 10. Consolidation Process. The management of bonds and mortgages has also been incorporated into the system In an effort to consolidate the data in the and all information on bond type guarantees consolidated database, the following has been migrated to the consolidated processes were implemented: database. - A new mechanism for consolidating the Finally, a new Infoclase at the query level has data from debtor files and debt in the been incorporated to monitor the processing consolidated database immediately. of these guarantees by the different bodies in - Replication of accounting movements. charge of their custody. - Consolidation of justifying information on deposits. - Consolidation of data for calculating late interest.

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11. Resources. Assistance Method. Three new marks were also added to form 347: A new Infoclase in the query phase was added to the consolidated database to enable - IAE mark (Economic Activity the users of this application to consult and Tax) indicating whether the main heading control the status of all cases, as well as was obtained from the VAT form (mark 1), information on appeals and claims. from the IAE census (mark 2) or could not be obtained (mark 3). - Mark with the IAE heading of the main Auditing Procedure activity of each client or supplier. - Integrated Collection System mark The most significant developments during the indicating whether the taxpayer actually has year in this area were as follows: outstanding debts in the executive phase in excess of 6,000 euros. 1. Auditing Plan. An application has also been designed to - Historical Query of Intranet: In 2003, a download summaries of the returns and self- number of corporate applications were assessments filed by taxpayers. implemented in the new Intranet web environment which will gradually replace 4. Documental Databases those of the consolidated database. The first such application to become operational was A database containing the Auditing the historical query. Using this option it is Procedures Manual became operational possible to access the information in the which enables users to consult a completely historical file of auditing proceedings from this updated version of the manual. new environment. - Maintenance of Auditing Plan phases An application was developed for queries of and proceedings on the Intranet: with this the Auditing Department in which questions new option it is possible to add, modify, are raised and answered and users can delete and associate phases and search for previously-entered questions and proceedings via the Intranet. answers. This application is arranged and - Auditing Plan tracking via the Intranet: a organised to satisfy the needs of the compressed version of the Plan has been Department. implemented on the Intranet so that the Department can start running tests and becoming familiar with the new environment. 5. Taxpayer Selection Tools

In addition to the new taxpayer selection tools 2. Reports employed this year using ZUJAR and Neuronal Networks, the previously-existing During the final months of 2003, efforts CLASSES and CROSS-CHECKS were continued to analyse and develop the new updated. Two new cross-checks were Reports application for the Intranet. introduced in connection with the Special Real Estate Plan: 3. Verification Assistance Method - Capital gains-personal income tax: New downloadable forms such as monthly Compares real estate transactions with the VAT forms were added to the Verification capital gains declared on income tax returns for the years: 1999, 2000 and 2001.

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- Urban property-personal income tax: On-line declarations. Compares potential tenants with the income from property rents declared on income tax In 2003, a procedure was developed for returns for the years: 1999, 2000 and 2001. electronic filing, via the Internet, of form 111 to be filed by public administrations, including Certificates Social Security, as well as applications for queries and management of attachments. The most relevant improvements during the fiscal year consisted of: The Internet filing applications were also adapted to the new forms 202, 218 and 222, - A new VAT taxpayer certificate the latter of which must now necessarily be - A new certificate for non-profit entities filed via the Internet.

Web Applications (Intranet / Preliminary processes were also developed Internet) in 2003 to prepare for the implementation of electronic filing via the Internet of forms 210, In 2003, worked commenced on the process 211, 212 and 213, non-resident income tax, of adding database applications to the which are used to report the income obtained corporate Intranet and the Internet. without a permanent establishment in Spain, withholdings on real estate acquisitions by This dual-faceted process consists of non-residents without a permanent developing new database applications in web establishment in Spain and the special environments and converting traditional property tax for non-residents as well as form database applications into Web applications. 214, a short form used by non-residents to In the process, the Tax Agency is following declare capital gains tax and non-resident the general criterion of developing and income tax. implementing in a web environment those applications which afford greater added value In relation to the management of the security by offering functions that are impossible to codes which support the security of electronic implement in a traditional 3270 environment, payments and messages exchanged with such as the inclusion and/or reproduction of banks and other public entities (generation images, sounds, etc. and control of NRCs), certain improvements were made such as transferring them to the The Agency has generated a support database and enabling the logical elimination infrastructure for web application of financial entities. development that enables the applications to be installed on the corporate Intranet and the Cooperation with Other State Internet. Bodies and Administrations

Some of the most important web applications 1. Sharing of Information with Public added to the Internet/Intranet in 2003 Administrations included queries of the fiscal vector and the notices or acknowledgements of receipt by a The main innovations introduced in 2003 particular taxpayer, either directly or through were as follows: a proxy and the subscription of taxpayers to the notification service using SMS messages - Automation of the information supplied for to mobile telephones or via e-mail. scholarships offered by the Ministry of Education and Science.

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- New social benefit information. Created updating the taxpayer selection tools, especially for INSS, INEM, ISM. particularly by means of information cross- checks. - Parties to communities of property. In this regard it is worth noting that the - "Up-to-date” information by Editran. Autonomous Communities provide the Tax Agency with information on Transfer Tax, - New option for mass requests for Stamp Duties and Inheritance and Gift Tax. references. The Tax Agency sends the Autonomous Communities information on Wealth Tax and Within the framework of the agreement with Economic Activities Tax annually and monthly the Social Security General Treasury (TGSS), updates of the taxpayer census containing it is now possible for authorized users to the additions, deletions and modifications of request and recover, after processing by the the census. Social Security General Treasury, information relative to a person's work history (VILEM file) An innovative feature of the information on contained in the database but which cannot Wealth Tax, for declarations filed via the be consulted directly by accessing the Internet or in PDF format, is that the Tax information system. Agency now sends a file containing the entire declaration and provides a ‘visor’ to facilitate As in the past, the Tax Agency continued to viewing, thereby practically eliminating the send the names of taxpayers not listed in the use of paper. census to the Ministry of the Interior for verification. Depending on the answer that Changes have been introduced in the way comes back, they are either added to the cross-checks for Wealth Tax and Inheritance identification system (IDEN) or notified to Tax are updated, with new criteria for a more correct their situation accordingly. accurate selection of taxpayers for auditing. The wealth CLASS was also updated. 2. Collaboration with Autonomous Communities and Cities The collaboration with independent Autonomous Communities focused on In 2003, the activities in relation to the consolidating the exchange of information collaboration agreements with Autonomous that is necessary for each one of these tax Communities focused primarily on administrations to carry out their tax maintaining the supply of information management and auditing missions. This provided by the Tax Agency to the information has to do primarily with the Autonomous Communities and receiving different information declaration forms. information from them in return, as well as

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TABLE No 87 COOPERATION WITH AUTONOMOUS COMMUNITIES INFORMATION SENT ASSESSMENTS RECEIVED FROM AUTONOMOUS TO AUT. COMMS. IN AUTONOMO COMMUNITIES IN FISCAL 2002 US 2003 Economic COMMUNITY Wealth tax Stamp Transfer Business Activity Tax Inheritance Gift Tax 2002 Tax Tax Operations 2002 Andalucía 81.781 623.676 205.255 110.106 23.085 11.993 3.213 Aragón 35.748 136.840 19.686 18.404 2.807 1.529 167 Asturias 22.771 76.899 40.912 33.039 1.006 11.614 1.164 Balearic 28.454 129.605 67 81 4 - - Islands Canary 28.841 187.828 52.795 18.683 6.817 21 21 Islands Cantabria 12.832 54.338 10.876 10.551 1.069 463 463 Castilla 20.060 176.367 35.880 18.403 3.754 - - La Mancha Castilla y 51.957 253.900 67.844 147.090 15.218 6.932 6.932 León Catalonia 220.091 734.646 62.083 72.926 31.658 815 815 Extremadura 9.453 93.078 26.816 15.995 3.367 468 468 Galicia 50.215 242.930 10.436 96.307 13.640 6.876 6.876 Madrid 160.475 554.228 89.529 141.429 55.603 3.001 3.001 Murcia 15.618 116.558 64.561 67.877 10.644 2.693 2.693 La Rioja 9.702 33.347 13.166 9.422 2.446 1.446 1.446 Valencia 100.695 468.088 274.346 126.146 23.568 2.061 2.061 Ceuta 1.223 5.678 2.953 1.165 246 - - Melilla 1.294 5.812 - - - - - Source: Information Technology Department.

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TABLE No 88 INFORMATION EXCHANGED WITH REGIONAL GOVERNMENTS ENJOYING SPECIAL RIGHTS (FISCAL 2003)

RECORDS RECORDS SENT RECEIVED REGIONAL AUTHORITIES OF ÁLAVA 735.875 1.087.582 REGIONAL AUTHORITIES OF 832.202 1.654.884 GUIPÚZCOA REGIONAL AUTHORITIES OF VIZCAYA 1.902.670 10.127.386 GOVERNMENT OF NAVARRE 900.198 1.652.124 Source: Information Technology Department.

Cooperation with the European pre-defined forms for exchanging data with Union other member states of the European Union as part of the administrative cooperation conventions. The Tax Agency also took 1. VIES strides in supporting the implementation of CCN Mail in the area of debt collection The efforts of the VIES development staff (HAC/2324/2003 Order which established were focused in 2003 on the creation of a detailed regulations for mutual assistances in new version of the application which will be collections pursuant to Directive 2002/94/CE implemented in two phases over the next of 9 December 2002). fiscal year (2004) and which will introduce significant changes: 2. VAT for electronic services - In the fight against fraud, A Register of Intra-Community Operators (ROI) was set up A new VAT system took effect on 1 July 2003 by order of Royal Decree 1041/2003, applicable to the provision of electronic developed in HAC/2567/2003. The objective services using telematic media in the is to register operators in a census upon European Union. A simplified payment request and to establish risk-control criteria. declaration procedure was introduced for - Ten new members joined the European companies not established in any member Union as of 1 May 2004. state, pursuant to Council Directive - The change in the communication system 2003/38/CE which modified the “sixth with the countries of the European Union directive” on VAT and the Commission takes place before 1 July. Regulation CE 792/2002 on administrative cooperation (see also the 2003 Measures Act In 2003, Spanish taxpayers’ use of the and the Ministerial Order HAC/1736/2003 of Internet feature to make VIES census queries 24 June 2003 which developed the special increased. This feature allows an operation system). to be classified firmly as an intra-Community operation for VAT purposes. Under this procedure, the filers who choose Spain as their member state for identification Finally, a secure electronic mail system (CCN purposes must present a quarterly VAT self- Mail) was implemented along with a set of assessment form. Likewise, each member

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state that receives the declarations-self Applications in the Customs and assessments must pay the VAT accrued in Excise Area them by the deadlines set in the Directive. The most significant activities in the Customs The application supports the simplified and Excise Area in 2003 centred around procedure placing emphasis on the use of strengthening the following aspects of the telematic media in all interactions between information system: the operator, the identification state and the member state. The following functions are ƒ Taxpayer information and assistance in supported: complying with their obligations through the Virtual Office and offering them high quality, Census management abundant information through the Customs Declaration management and Excise Internet Portal. Management of income and payments, including accounting. ƒ New developments to tighten control on Message exchanges between states, tracking foreign trade and excise taxes, mechanizing based on different criteria (origin, type, errors, existing procedures or those created as a dates). consequence of the regulations.

The application provides the means for ƒ Incorporating added value to applications processing the entire cycle (registration, that have already been implemented, declaration and payment) electronically, with migrating them to the corporate Intranet. This the exception of corrections. Corporate has made it possible to introduce the concept applications technology was combined with of the Virtual File and the processing of Internet technology to support Unicode-based multimedia formats. internationalisation (which enables names and addresses to be written in any alphabet, including Cyrillic, Chinese and Arabic) and 1. Actions Aimed at Facilitating data exchange formats. On this last point, an Compliance with Necessary agreement was reached by the European Paperwork Union and the OECD on a basic vocabulary of tax terms to be used as the basis for future a) On-line declarations. In 2003, Internet data exchanges between tax administrations. became the principal channel of communication with foreign trade operators. In order to support this procedure it was Value added network traffic declined necessary to make certain adjustments to the considerably and is expected disappear accounting information form, among others. completely in 2004. The most significant of these included opening two new accounts with the Bank of b) Virtual Office: Formalities over the Internet. Spain for depositing this income, the More options were offered by the Virtual establishment of channels for notifying the Office in 2003 in the quest to continue Agency of the income collected on a daily advancing toward an Integral Virtual Office basis and the associated accounting where all Customs and Excise paperwork can application and the development of a be handled by Internet. mechanism for notifying the details of these deposits to the declaration management By the end of the year, the Virtual Office application. menu contained 14 level one options with a total of 120 sub-options. There were 21,428,581 transactions in 2003.

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The most significant developments made this send customs authorities the balances in year for using the Internet as a means of each warehouse by a certain date. To do so, communicating with the taxpayer are: an option for submitting this information was added to the Virtual Office (initial entry file). 1) Social collaboration for excise taxes In 2003, the option of filing excise tax 4) Consultation of Single Administrative declarations through social collaboration Document (SAD) and modification of Export became available for the tax forms lists in SADs via EDI. point two, part three of the HAC/1398/2003 In 2003 an option was added to the Virtual Order of 27 May. This Order established the Office which permitted operators and their conditions under which the social agents to consult all of the export, import and collaboration could actually play a part in tax transit SADs submitted by them and on file in management, which extends to the on-line the Customs Information System. presentation of certain forms and tax documents. Also in 2003, it became possible to modify some export SADs electronically under 2) Group Payment of Foreign Trade certain conditions as established by the Assessments Customs and Excise Department by sending To simplify the payment of foreign trade debts EDIFACT/CUSDEC messages. via the Internet, in 2003 the Tax Agency introduced the option of grouping an c) Customs and Excise Portal The Customs operator's debts together to generate a single and Excise Department continues to add to receipt for the total amount of the individual the Internet-based services it offers in terms debts combined, although individual receipts of both information and electronic processing. can be obtained to justify the payment of In keeping with this effort, it continued the each individual debt. work commenced in 2002 to create a Customs Portal within the Tax Agency Portal, 3) Management of Bonded warehouses addition more content to the Portal. It is now possible to file two new deposit documents through the Virtual Office: SDD The specific actions in the regard, grouped (exit from bonded warehouse and VTA together by subject matter, are as follows: (notice of sale in bonded warehouse ). For the first of these, a new EDIFACT/CUSDEC 1) Spanish Customs. General information on message has been developed and for the the central and regional Spanish Customs second an HTML form has been created to structure, the fight against fraud, international be completed by the operator. relations, informative brochures, etc. Publication of the results of the fight against The Virtual Office now also contains two fraud and OLAF reports for 2003. options that offer the possibility of the owner of a warehouse (or the owner’s proxy) 2) Customs Proceedings. Provides authorizing a depositor to carry out information on the filing procedures for operations which include the goods in that certain documents, processing of samples, warehouse. The authorisation may be a one- electronic filing, precursors, forms, etc. Also time or standing authorisation, may be contains tariff information and updates of restricted to a certain period of time or to technical guides for EDIFACT messages for specific goods and to a maximum quantity. Intrastat declarations, bonded warehouses, Finally, in order to begin controlling the stocks export SADs and import SADs. in bonded warehouses, it was necessary to

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3) Excise Tax Contains the studies relative to BUDAnet. The objective is to complete the excise taxes for different years and migration in 2004. information about filing excise tax documents. A new version (v4.0) of the help program for Important advances were made in the three completing forms 500/503/511 with the codes basic areas into which the information system and headings for fiscal year 2003 was can be subdivided: Foreign Trade, Excise published. Tax and Auditing/Investigation.

4) Foreign Trade Statistics. Provides different The most notable functionalities in the new types of data and reports: informative Intranet environment are as follows: brochures on transit, Intrastat, passenger regimens and franchises; the statistical data Ability of the applications to handle indefinite for 2003 were updated; foreign trade reports lengths of information/data: free text and statistical positions file with specific documents and images. treatment for the entire year. Virtual File: storage of all file documentation 5) Regulations: Contains all of the in the database using a scanner to covert the regulations of interest. The consolidated information on paper into a format that is Customs Code and modifying regulations readable and manageable by the computer. were published with searches and summaries by subject matter; the file was updated with Exportation of a table to an Excel the Combined Nomenclature for 2003; spreadsheet which can be displayed by the publication of the HAC/1398/2003 Order user's browser. establishing the conditions under which the social collaboration could actually play a part Use of an advanced editor embedded in the in tax management (with particular emphasis application which supports complex functions on the Customs Virtual Office). such as: source formats (bold, italics), inclusion of ‘title’ type formats, use of tables, 6) Links. Direct links to websites of interest indenting with symbols and/or numbers, etc. with customs and excise tax information were maintained. l) Customs and Excise Verification Assistance Method (MACA). The objective 2. New Developments of the Verification Assistance Methods is to serve as the basis for actuaries in the a) Migration of BUDA to BUDAnet. One of performance of their auditing activities. This the basic objectives of the Customs and support function takes the form of a proposed Excise information system is to take full repertory of actions to be carried out on the advantage of the functionalities of Web taxpayer; an explanation of the purpose and technologies for the development of complex contents of each one of the actions; and a section containing relevant information applications. obtained from databases (cross-checks, data Substantial progress was made in 2003 in tables or database connections). migrating the BUDA system, which has been renamed BUDAnet, to the corporate Intranet. The development of this new computer tool in the Intranet environment was completed in By the end of the fiscal year, approximately 2003, broadening the repertory of actions to 50% of the options had been migrated to include a great number of sectors and expanding the contents of relevant information on the company under scrutiny,

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finalizing its integration in the Customs and ƒ The comparative analysis part makes it Excise Tax Auditing Plan. possible to access especially important auditing information which is obtained by c) Customs Auditing Plan. With regard to comparing different magnitudes which the Auditing Plan, in 2003 a new document should correspond partially or completely management system was developed to with one another. enable actuaries to keep standardized records during all phases of the auditing f) Early Warning System. In compliance with proceedings: notifications, proceedings, HAC/2696/2003 Order of 27 August, which reports, assessments and penalties. The established an early warning system for the services of the Printing and Envelope Stuffing intra-Community transit of certain Centre were used to send the notices to the merchandise subject to excise tax on addressees with the digitalised signature of manufactured goods, (Official Gazette 02-10- actuaries. 2003), a new application was developed to manage the prior warning issued on d) Excise Tax Notices Likewise in the shipments and goods received which are Excise Tax area, work continued toward subject to excise tax according to the adapting the notices sent to the new standard conditions established in the Order. With the forms of the Tax Agency with digitalised new application it is possible to manage the signatures. Here again, the services of the images of the accompanying documents Printing and Envelope Stuffing Centre were received with the goods and to display them used. In 2003, the Agency used this channel to the regional offices in charge of verifying to send notices of errors contained on that the products have been received by the operations declarations - forms 553, 554, receiving establishments. 556, 557, 558, 570 and 580. g) Disciplinary Proceedings involving e) Integral Query (FIM). A new tool was Excise Tax, Foreign Trade and Customs developed in 2003 in the new Intranet Auditings. In an effort to complete the environment which allows users to access all customs information system by adding kinds of information on taxpayers - both functions which greatly improve the basic and advanced - using the information organizational operations and efficiency, the sources generated by the MACA Auditing Tax Agency undertook the development of a application (Customs and Excise Tax specific management application for Verification Assistance Method). It is disciplinary proceedings. Since the structured in three parts: application is heavy on the documentation side, it was developed in an Intranet ƒ The Access to the application part offers environment. This way it is able to support different real time (on-line) connections to the dynamic preparation of the ordinary and other Customs and Excise applications short-form documents established in the and the consolidated database (BDC). disciplinary proceedings.

ƒ The Year-on-year analysis offers all kinds With this application it is possible to retrieve of batch tables to verify the quantitative and track disciplinary proceedings, to prepare relevance and the evolution over time and manage notices (including sending them (four fiscal years) of the taxpayer's to CIE), register the fine in the Integrated principal magnitudes relative to customs Collection System (SIR) and to monitor the and the tax system in general. deadlines set in the proceedings. In the case of auditing proceedings, the paperwork is

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generated by the Customs Auditing Plan and j) Complementary Assessments and the information is sent to the SCGA. Dispatch Results. A new Intranet application was introduced in 2003 for the integral h) Customs Surveillance Database of management of complementary foreign trade apprehensions with image processing. assessments: Taking advantage of the multimedia capabilities of the new Intranet environment, • Complementary assessment of import a new application has been developed which SAD WITH reference document data. These captures and displays the images of are complementary assessments on import apprehensions by Customs Surveillance. SADs as a result of automatically obtaining the data that have changed from one version With this new application it is possible to of the SAD to the next. create and maintain a database with the different modes of concealing drugs - including photographs and descriptions of the • Complementary assessments of import most common cases – for consultation by SAD WITHOUT reference document data. Customs officials. These are complementary assessments of import SADS which do not make use of the i) Automatic transmission of Customs SAD data. Surveillance data to the National Drug Plan. In response to the need to remit certain • Complementary assessments of other information to the National Drug Plan relative documents WITHOUT reference document to the results of the control and investigation data. These are complementary assessments actions of the Customs and Excise of any document which do not make use of Department and the Deputy Directorate of the declaration of reference data. Customs Surveillance, a document management system was devised in 2003 In close collaboration with the rest of the which makes it possible to obtain printed files related applications (imports, guarantees, with information on activities, arrests, people accounting), this application makes it possible involved, goods seized, drugs, etc., which are to automate the entire process, which then forwarded to the National Plan. includes issuing notices as necessary, and As part of the projects of the National Drug sending all correspondence as necessary, Plan for the coordination of activities and either manually or via CIE, to the interested investigation of drug smuggling by the parties. Customs and Excise Department, the Deputy Directorate of Customs Surveillance, the Civil Another application was introduced for Guard and the National Police Corps, an assessments derived from dispatched import application has been implemented which SADs: Dispatch Assessments which adhere automatically sends to the National Plan all to the outline of the previous application, actions (results) and investigations albeit in a much simpler way. (investigation plan) generated or modified as often as desired, which is currently once a k) New application for SAD import day. dispatches and notification of release. In 2003 the Agency undertook the development of an Intranet application for the dispatch of import SADs. In addition to the functionalities of the former 3270 application, innovations have been added to facilitate the dispatching

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process, providing all of the relevant TIR records in Spain, whether shipments, information on a single screen. partial loadings or unloadings, entries and exits or completions, thereby tracking the The application is integrated with the entire life of the TIR records. Dispatch Assessments and provides facilities for modifying the SAD and automatically This application was developed in an Intranet recalculating the assessment. environment. Given the Tax Agency’s commitment to notify the data on all In includes a new notice management feature completions and partial unloadings in Spain and supports the generation of foreign trade to the issuer of the records, a specific option information files as necessary. has also been enabled on the Customs Virtual Office to enable the issuer, which is Finally, in order to facilitate the operator’s ASTIC, to make queries. work in collecting the goods from Customs, the application includes a facility for sending n) Fiscal identification mark audit operators an SMS message or e-mail to requests. In keeping with the commitment to inform them that the goods have been provide complete and accurate information to dispatched. In order to enable this facility, the Customs to enable it to fight effectively filer must include the e-mail address for against piracy, and since the Intranet notification purposes in the EDIFACT infrastructure now enables us to incorporate message when the declaration is registered. images into the applications, the Agency has Once the goods are cleared, the message is started work on the development and generated and sent, informing the filer that implementation of an application to manage the goods have been released and including identification mark audit requests. information on the number and markings of the items. With this application it is possible to manage the status of the different auditing requests l) Payment of Foreign Trade Assessments submitted to the Customs and Excise The Agency worked intensively in 2003 to Department and, more importantly, to furnish develop the necessary modifications to the customs officials at any given time updated Customs accounting application which would information on the different marks which have allow the payment of foreign trade debts by requested protection, with all of the graphic any collaborating entity. To do so, a link was and non-graphic information needed to locate set up to the “Pay Tax” general option on the the merchandise which could be violating the Tax Agency website, and processing of the protected rights of a particular mark. fortnightly files sent by collaborating entities and the updating of Customs accounting Other Applications records. 1. Data Input System m) TIR transit records. In an effort to complete the customs information system by With the implementation of the new adding functions which greatly improve “ENVINET” application, it is now possible to organizational operations and efficiency, the enter the declarations filed on paper from the Tax Agency undertook the development and Agency’s Intranet using the PDF417 system, implementation of the first phase of an thus guaranteeing that it is universally application to manage TIR transit records. available and automatically updated. The “ENVIWIN” application can still be used to This application makes it possible to collect read diskettes. the data on each one of the movements of

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The Reading and Classifying System (SLC), evaluation phase of training courses in the an industrial declaration-processing system, Intranet environment was also completed. consolidated its position as one of the main pathways for data entry. In 2003 the SLC The following are noteworthy among the processed over 8 million returns made out on sectorial developments for human resources forms 100, 180, 190, 347, 714, 390 and 201 management: from all over the nation. - A new help tool is available in the Social 2. Document Management System. Action module under the “employee qualification” module. The use of this system was extended to the - A new volume has been added to the National Auditing Office headquartered in Graphic Station with all of the plans divided Valencia and the Regional Auditing Office in into chapters. The pertinent corrections are Barcelona. made following reforms introduction in the Department’s two buildings. 3. Human Resource Management - Certification groups have been added to the Allowances module. With this change, Applications personnel are distributed on the basis of specific, previously-define work groups. The results of the implementation of automatic document entry can be seen on the Finally, with regard to corporate applications, Human Resources Bulletin Board. There was the tool “Web Services Infrastructure and a significant increase in the number of forms Administration” can be used to develop entered automatically by Agency personnel to applications in Intranet and Internet request financial aid, job transfers and environments using the Tax Agency’s existing medical exams. This option is scheduled for computer structure and integrated simply into inclusion on the Intranet and Internet next graphic environments. This guarantees the year, which will make it possible to send file use of standards and the coordination with all attachments with the applications submitted of the units involved in systems and electronically. development.

The basic projects for the new centralized approach to security and scheduling control 4. Management Applications for the were also approved and are scheduled for Internal Auditing Service development and implementation in 2004. This is intended to facilitate the change from Work continued throughout 2003 to develop the current terminals to the new clocks tools that use Data Warehouse technologies capable of transmitting data by TCP/IP. The to study and analyzing the growing quantities use of web technology will save on of information that are processed. Different transmission time and remove this task from applications were developed based on the the current equipment. The system is Data Warehouse and Zújar systems to foster managed centrally and electronic processing the use of interfaces that provide simple will save both time and money. access to the desired information and to make it easier to understand and interpret On the training front, a new tool was that information. developed to enable the electronic submission of applications to participate in To this end, a new version of the Zújar the courses included in the Continuous application became available in 2003 which Training plan. The development of the can be accessed through the Intranet.

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the possibility of awarding the different The Data Warehouse (DW) project is being batches separately. On the investment front, used intensively by the Internal Auditing improvements were made to queries, Service as a basic tool in its everyday work. processing times and the management of The management analysis subsystem was expiry dates on successive tract contracts to consolidated in 2003 and steps were taken to avoid extensions. permit the creation of a Data Mart of Activities of the Tax Agency. This will make it possible With regard to the Cash and Treasury to track and control many of the areas where Modules, changes were made to the manner the Tax Agency works. in which allowances paid in advance and As far as Knowledge Management Systems travel expenses are processed for a more are concerned, the specifications for the integrated management of these costs. Contextual Analysis System for the Internal Auditing Service were established. The aim of As a consequence of the approval of the this system is to detect situations within the special system applicable to services Internal Auditing Services where there may rendered electronically, and inasmuch as be a risk of irregular conduct based on the Value Added Tax is concerned, an use of filters or rules that define patterns of application was created to make payments to risk. EU member countries for the operations carried out by Spanish operators in other EU 5. Automatic Voice Recognition member countries. System (VRU). Finally, an application was introduced for 2003 marked the ten-year anniversary of the secure electronic notices. From the beginning installation of the automated telephone of October through the end of year, 2,520 service which has received a total of people had subscribed and 5,436 notices had 3,152,274 calls. Some of the new been sent. functionalities that were added in 2003 included various data request options, 7. Documental Databases including the option to request 2002 income certificates in Catalan, which was added to The corporate Intranet has become the basic the already existing ones relative to the status instrument for the documental management of income tax refunds, information on VAT initiated the year before, with the refunds, and information on identifying labels incorporation of the following new and tax data. Documental Databases:

6. Economic and Financial - Press clippings: Application for the administration, management and consultation Management Applications of the press clippings selected by the Human Resources Department. The help module for preparing the Tax Agency’s budget bill and for the submission - Database of Internal Auditing Service of queries to budget managers was reports: This is a document database where implemented. Improvements were made to the reports of the Internal Auditing Service other queries to facilitate the preparation of are stored. It has multiple forms, views, certain quality assurance reports, including access filters, etc. itemisation by type of case and acquisition module options which include the possibility of converting annual files into plurianual and

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-Legal Services Document Database: It is begun in years before with the Autonomous composed of 5 databases (general Communities of Andalusia, Cantabria, document, internal documentation, case law, Castilla La Mancha, Valencia and La Rioja. information-sharing and personal affairs). At the Autonomous Community level, the -Regulatory Database (Aranzadi and collaborative effort with the Autonomous Normacef: These tools are generally Community of Madrid for the design and contained on DVDs which are provided by the development of the dynamic generation of owners. They are installed in the local area forms and help programs on that network services and the client software is Community's tax website was concluded. installed in the workstations authorised to At the local level, the collaborative effort access the data. Universal access to these continued with the provincial government of databases was enabled in 2003 by installing Cadiz, aimed at adapting the revenue the DVD and access software in a centralised management model to accommodate the unit, the only limit being the number of system for comprehensive management of concurrent users. funds collected.

8. Management Control and As far as technical projects are concerned, a technical diagnosis was developed and Monitoring Applications. delivered to the Ministry of Science and Technology on the status of the applications The following management applications were installed and the logical architecture reprogrammed and added to the corporate supporting information services, offering Intranet in 2003: possible alternatives for integrating all data and making the existing procedures more - Tax Agency Objectives: The purpose of this flexible. application is to facilitate the tracking of the main objectives of the Tax Agency by At the international level, the Spanish Tax providing aggregate information on different Agency is working in collaboration with the indicators, including those relative to liquid National Tax and Customs Administration of taxes collected, taxpayer information and the Republic of Colombia on the MUISCA assistance, control results and debt recovery. Project for the design, development and implementation of a single automated tax - Quality Management: The purpose of this revenue, service and control model. application is to facilitate the tracking of indicators of the Tax Agency’s fulfilment of its A technical diagnosis was also prepared on objectives. the Tax Management Model used by the Republic of Uruguay. - The General Tax Control Plan encompasses the departmental control plans and the integration standards. ‰ Taxpayer Assistance

The help programmes available to taxpayers 9. Technical Support for Autonomous in 2003 were those corresponding to: income Communities and Local Authorities tax returns (PADRE program), wealth tax (714), corporate income tax (201), VAT (390, The Autonomous Community and Local 392, 311 and 300) and modules (131,310); Authority Support Group continued in 2003 to informative declarations on forms 180, 182, collaborate in the development, 188, 190, 193, 198, 296, 345, 347 and 349; implementation and tracking of projects

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and “fast refund” requests (104, 105). Two (CIRCE) project, payment of fees for public versions of the withholding calculation administration bodies, credit card payment of programme for 2004 were created. They self-assessments and assessments in were distributed on compact disc along with member entities, request and confirmation of the taxpayer calendar and in a “multiplatform draft income tax returns, empowerment for component version” to be executed using fiscal data and tax obligations, consultation of third party applications and different operating notifications, “acknowledgements of receipt”, systems. periodic self-assessment tax obligations, subscription to the service sends notices to Approximately ninety percent of the mobile telephones and e-mail addresses. declarations received by the Tax Agency are Finally, mention should be made of the completed using these help programmes. expansion of the services for filing the declarations of financial entity clients, the Help programs have continued increasing incorporation of the Generalitat Valenciana as their interactivity with the Agency’s web a Certifying Authority and finally, the inclusion server, so that taxpayers can gain access to of 47 additional financial entities for the specific rules, FAQ pages and even the payment of self-assessments. automatic program update, right from the program itself. ‰ Statistics and Tax Studies Area

In 2003 the PADRE program was equipped In 2003 the functional realms focused on the with the ability to download the taxpayer’s following items: fiscal information directly from the Internet • In honour of the European Year of the and Intranet, with the possibility of the data Disabled, a work group was formed to design being applied to the declaration directly using and promote actions during the 2002 income an automatic assistant. tax season. The collaborative efforts in this area consisted of the preparation of a tax With regard to the secure server census of people with disabilities and diverse (https://aeat.es), simplified help programmes studies on the composition of family units, were implemented as well as the electronic geographic distribution and the level of filing of tax returns using digital signatures disability. and programs for the electronic filing of the following forms: • As in previous years, the Agency 030: Notification of address changes or continued to monitor the conventions signed changes in family or personal circumstances. by the Secretary of State for Finance with 111: Withholdings and payments on other administrations, specifically the account for public administration personnel. Convention with the National Statistics 140: Advance payment of maternity Institute and the Convention with the deduction. Secretary of State for Energy, Industrial 367: VAT on services rendered Development and SMEs. electronically. 696: Fees for the exercise of jurisdictional • The most notable tax statistics are those authority in civil and contentious- based on the electronic filings of large administrative orders. enterprises, which take the form of three products: New services were also added, some of the most notable of which included the electronic ƒ Advance Large Enterprise Bulletin billing with electronic signature, participation This is a monthly publication on VAT in the Sociedad Limitada Nueva Empresa

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and income tax withholdings in hard website or consulted “on-line”. copy format. ƒ New VAT statistics for 1997-2002 ƒ Large Enterprise Bulletin This is in html format for groups of published annually with quarterly companies with details by sectors details in CD-ROM format. and results. These statistics can be ƒ Annual report on Principal Results downloaded from the Tax Agency's of Electronic Filings. website or consulted "online".

• The following statistics were also • The Agency participated in the preparation gathered: of the 2004 Annual Report on Tax Benefits, where tax benefits were quantified for ƒ 2001 company statistics on paper corporate and personal income tax and format. comparative evaluations were drawn with the ƒ 1999-2000 company statistics in tax benefits from value added tax and tax on java and excel format on groups of insurance premiums. companies with details by sectors and results. These statistics can be downloaded from the Tax Agency's

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