Spanish Tax Agency

The Spanish Tax Agency was officially and collects other revenues on created by article 103 of Act 31/1990 of 27 Autonomous Communities’ behalf as December on the 1991 National Budget, ordered by legislation or agreed under although it only took real form on 1 January cooperation accords. 1992. It is an organization under public law, dependent on the Ministry of Finance - Collection of the European Union’s own through the Office of the Secretary of State revenues. for Finance. As it operates under public law, the Tax Agency uses a legal framework of - Customs management and the fight its own that differs from the legal framework against smuggling. applied to the General State Administration, so the Tax Agency enjoys a certain - Collection of charges people pay to the autonomy in budgetary matters and Spanish public sector in voluntary personnel management, although it does compliance with rules and regulations. always uphold the same essential underlying principles of good government - Collection of revenues owed by law to action. the General State Administration and the public organizations linked to it or The Tax Agency’s job is to apply Spain’s dependent on it, and the taking of legal tax and customs systems effectively and, proceedings to enforce collection. when so mandated by law or by agreement, to act as a proxy for other public - Cooperation in the fight against certain administrations from Spain or the European offences, primarily offences against the Union and manage their tax resources on Exchequer and smuggling violations. their behalf.

The Tax Agency is not in charge of managing the sorts of taxes that the regional governments of Spain’s Autonomous Communities levy (mainly transfer tax, stamp tax, inheritance tax and gift tax) or the types of taxes that municipalities and other local corporations manage. Nor does it have the power to draft and approve tax legislation or, on the public expenditure side, to earmark public resources for any of their many different uses.

The Spanish tax and customs system provides comprehensive management for a wide range of activities, including:

- Management, auditing and collection of taxes owed to the State. - Important functions related with the revenues Spain’s Autonomous Communities and Autonomous Cities receive; it manages personal income tax

5 Spanish Tax Agency

Organizational Structure Structurally speaking, the Tax Agency can be broken down into Central Services and The Tax Agency provides a public service. Territorial Services. It is governed by its Which is carried out, with a specialised Chairman (Spain’s Secretary of State for administration that can quickly and Finance), a Director-General, a Higher efficiently adapt to changes in the social Board of Directors, a Standing environment where the Agency operates. Management Committee and a Territorial Management Coordination Committee.

CHAIRMAN

HIGHER STANDING TERRITORIAL SECURITY JOINT BOARD OF MANAGEMENT MANAGEMENT AND COMMISSION DIRECTORS COMMITTEE COORDINATION CONTROL ON TAX COMMITTEE COMMISSION MANAGEMENT COORDINATION

CABINET

DIRECTOR OFFICE OF THE DEPUTY COMPTROLLER GENERAL OTHER SUPPORT UNITS

DEPARTMENTS AND REGIONAL OFFICES SERVICES

PROVINCIAL OFFICES

LOCAL OFFICES CUSTOMS AND EXCISE OFFICES

1. Central Services 2. Territorial Services The Territorial Services follow the same The Agency’s Central Services are scheme of organization by areas, but on a organised into functional operational and territory-by-territory basis. There are 17 support areas. The Central Services’ Regional Offices (one in each Autonomous departments and services are shown in the Community) and 56 Provincial Offices organizational chart on the following page. (usually covering a province apiece), containing a total of 240 Local Offices, 37 of which are customs Offices

6 Spanish Tax Agency

S.G. Technical Tax Matters Tax S.G. Tax Information and Assistance Management S.G. Legal Assistance and Legislative Coordination Department S.G. Tax Verification and Control S.G. Planning and Coordination

Financial and S.G. Legal Ordinances and Legal Assistance Tax Auditing S.G. Studies, Methods and Procedures Department S.G. Planning and Control S.G. Territorial Auditing

S.G. Organization and Planning Collection S.G. Coordination and Management Department S.G. Enforced Collection S.G. Special Procedures

Deputy Directorate of S.G. Operations Customs S.G. Logistics Customs and Supervision Excise

Department S.G. Planning, Statistics and Coordination S.G. Customs Management S.G. Excise Management and Control S.G. Auditing and Investigation S.G. Chemistry and Technology S.G. International Relations

Organization, Deputy Directorate Standing Technical Secretariat of the Planning and Joint Commission on Tax Management Coordination Institutional Relations Department S.G. Organization and Coordination

S.G. Planning and Programming Chairman Director S.G. Outside Communications General

S.G. Data-Processing Planning and Coordination Information S.G. Operation Technology S.G. Applications Department S.G. Customs and Excise Applications S.G. Statistical and Tax Studies

Deputy S.G. Administrative Management of Directorate Personnel Human of Human S.G. Programming and Incentivation Resources and Resources S.G. Labour Relations Economic Administration Department S.G. Budgets and Financial Deputy Management Directorate of S.G. Accounting Economic S.G. Purchasing and Contracting Administration S.G. Real Estate and Facilities

S.G. Organization and Legal Legal Assistance Service S.G. Consultative and Litigious Affairs

Cabinet

Internal Service Inspectorates Auditing S.G. Tax Revenue Budgeting, Service Tracking and Study

7 Spanish Tax Agency

Guiding Principles - Promoting the professional development and training of Tax As the public agency in charge of managing Agency employees and adapting their the Spanish tax and customs system, the working conditions to a total quality Tax Agency has the prime objective of environment. collecting a major part of the revenues - Being flexible in the efficient use of the called for each year in the National Budget. available human and material The Agency has crafted a collection style resources. built on the basis of encouraging citizens to voluntarily comply with their tax obligations, Using these principles as its guide, the Tax but always adhering to the following Agency pursues two fundamental lines of principles: strategy.

- Reducing the formal burdens assumed First, it aims to provide citizens with direct, by private taxpayers and businesses in immediate facilities for discharging their tax the compliance with their tax obligations voluntarily. To do that, the obligations. Agency offers taxpayers more and better - Practicing fairness in the general services taking advantage of state-of-the- application of the tax and customs art technology. system in order to bolster the confidence placed in the Agency by Secondly, the Agency takes vigorous action citizens and to guarantee the most to check tax payments and fight tax fraud, efficient response to fraud and exert so as to ensure that the tax and customs standard tax pressure on the entire system is applied effectively. That way, country in its control actions. when citizens are called upon to contribute - Personalising services and establishing to the public pocket, that obligation is integral service and assistance systems applied fairly to all. for taxpayers. - Promoting Spanish Customs as the These strategic lines emerge out of the idea European portal to international trade. of total quality. Quality Management, as - Consolidating the Tax Agency as an the factor which guides the entire avant-garde branch of the public organization toward its objective of keeping administration in the intensive use of taxpayers completely satisfied by new technologies. continuously improving its services to meet - Opening the Agency up to institutional taxpayers’ expectations, is an collaboration, forging closer ties with indispensable tool within the Tax Agency Spanish society and with the public for achieving its goals. The consolidation of administrations of other countries. these methods and techniques guarantees - Safeguarding the integrity and permanent evolution toward an increasingly confidentiality of information within the modern, flexible, efficient and effective framework of a Tax Agency that is more institution. transparent to citizens. - Consolidating an organization built on In particular, by working to these quality the values of personal integrity and standards, the Agency is able to take more preventive action rather than adopting an professional ethics shared by all of its attitude of mistrust and reinforcement of members. controls after the fact. Hence, the - Developing internal communication and importance of management control and coordination within the Tax Agency to supervision, which must be a key factor in their fullest in order to generate any modern organization to guarantee that synergies. its managers possess the most up-to-date

8 Spanish Tax Agency

knowledge of the services they are in Human Resources charge of, thus avoiding the risk of mismanagement and enabling the The total number of employees working dissemination of the best practices for the Tax Agency as of 31 December 2003 was 27,504, which represents a In order to consolidate the Tax Agency’s decrease over the same date last year Quality Management, both in terms of the of 157 employees. There has therefore work it currently performs and any work it been a decrease of 0.33% in total proposes to undertake in the future, a functionary personnel and a decrease Quality Plan has been implemented with of 2.7% in regular employed personnel. the following objectives: In absolute figures, 2003 saw a reduction of 83 civil servants and 74 - To promote and disseminate the culture employees. These figures do not of quality in all departments of the Tax include the 1,251 part-time employees Agency. hired to help out in income tax season. - To establish the mechanisms which make it possible for the Tax Agency to These figures, when compared with the apply standard Quality Management Tax Administrations in comparable models. neighbouring countries, are not at all - To fortify the channels of high but rather on the low side. communication between the Tax Agency and other public and private The distribution of the Tax Agency’s organizations which can offer their staff as of 31 December 2003 was as experience and collaboration in the follows: area of Quality Management. - To encourage the internal and external - 88.1% of staff are employees of acknowledge at the national and peripheral services while 11.9% of all international levels of the improvements employees work for central services. to the services offered by the Tax Agency as a way of getting Agency - Contract employees account for 9.7% employees and management more of the total while officials account for involved in Quality Management. 90.3%.

9 Spanish Tax Agency

GRAPH I PERSONNEL DISTRIBUTION BETWEEN CENTRAL AND TERRITORIAL SERVICES

3.002 272 2.399

21.831

TABLE No 1 PERSONNEL DISTRIBUTION BETWEEN CENTRAL AND TERRITORIAL SERVICES

CENTRAL PERIPHERAL TOTAL SERVICES SERVICES Officials 3.002 21.831 24.833 Non-Officials 272 2.399 2.671 Employees TOTAL 3.274 24.230 27.504 Source: Human Resources and Economic Administration Department

- By civil servant’s qualification groups, numerical superiority there is held by the figures for groups C and D are very the members of the Higher Corps of similar. Group D is still the largest, with Tax Auditors and Customs Auditors. 7,679 staff members (31% of the total staff), and the majority of them belong - The proportions between the different to the General Auxiliary Corps. Group C groups of civil servants experienced has 7,948 civil servants (32% of the minor differences similar to those in total); most of the people in Group C previous years: decrease in the relative are members of the General Clerical importance of Group D (4.7% less: Corps and the Corps of Customs decrease of 366 people) and increase Supervision Agents. Group B holds in Groups C and B (increase of 2.6%: third place, with 29%, and is mainly 200 and 1% 70 people, respectively), made up of the Exchequer Technicians’ as a result of internal promotions. Corps, in addition to the Executive Group A remained practically Corps of Customs Supervision. Lastly, unchanged (0.9% increase: 18 people). there is Group A, which accounts for 8% of the Agency’s total personnel;

10 Spanish Tax Agency

TABLE No 2 PERSONNEL DISTRIBUTION BY QUALIFICATION GROUPS

CIVIL SERVANTS AS OF 31/12/2003 Number % GROUP A Executive Tax Auditing Personnel 1.509 Executive Customs Supervision Personnel 192 Higher Systems and Information Technologies Personnel 105 Public Finance Architects 50 Chemistry Professors for Customs 30 Rest of Group A 164 TOTAL FOR GROUP A 2.050 8 GROUP B Finance Specialist 6.134 Executive Customs Supervision Personnel 399 Systems and Data Processing Management 225 State Civil Administration Management Personnel 129 Rest of Group B 223 TOTAL FOR GROUP B 7.110 29 GROUP C Public Finance Agents 4.117 General Clerical, Specialised Tax Administration Personnel 1.723 General Clerical, State Administration Personnel 267 Auxiliary Data Processing Technicians 697 Customs Supervision Agents 1.027 Rest of Group C 117 TOTAL FOR GROUP C 7.948 32 GROUP D General Auxiliary, Specialised Tax Administration Personnel 7.246 General Auxiliary, State Administration Personnel 238 Rest of Group D 195 TOTAL FOR GROUP D 7.679 31 TOTAL FOR GROUP E 46 - TOTAL NUMBER OF OFFICIALS 24.833 90 TOTAL NUMBER OF NON- OFFICIALS EMPLOYEES 2.671 10 TOTAL 27.504 100 Source: Human Resources and Economic Administration Department

- The Management, Auditing, Collection Management has 6,737 employees, and Customs operating areas employ followed by Auditing with 4,998, 19,953 people, which accounts for 72.5 Collection with 4,556 and Customs with percent of the personnel. By area, Tax 3,662.

11 Spanish Tax Agency

GRAPH II PERSONNEL DISTRIBUTION BY AREAS

8.000

7.000 6.000

5.000 4.000 3.000

2.000 1.000

Tax Mgmt Auditing

Collection Customs Tax Data Processing Other

- An analysis of the breakdown of while that of female employees is 44. personnel by sex shows that 52.7% are By Groups, the group with the highest women and 47.3% are men. average age is E (at 55.8) and the lowest being Group B (at 43.5). By age - The average employee age is 44.4; the group, the breakdown is as follows: average age of male employees is 44.8

12 Spanish Tax Agency

TABLE No 3 PERSONNEL DISTRIBUTION BY AGE

AGE RANGE 18-32 33-40 41-48 49-56 57-70 TOTAL NUMBER OF PERSONS 1.183 8.658 10.733 4.869 2.061 27.504 % 4 31 39 18 7 100 Source: Human Resources and Economic Administration Department

TABLE No 4 PERSONNEL DISTRIBUTION BY SEX

WOMEN % MEN % TOTAL 14.496 52,7 13.008 47,3 27.504 Source: Human Resources and Economic Administration Department

Income Budget One part of these transfers is the Tax The Tax Agency has an annual budget of its Agency’s share of the sums it collects in own whose two main features are that its assessments and collection management overall total is restrictive in nature and its proceedings, or comes from administrative credits are distributed by economic acts decided or ruled by the Agency in the categories pursuant to an estimate. The sorts of tax management matters that fall Agency is financed fundamentally by current within its particular sphere of powers, which, and capital transfers from the State, which under point five b) of article 103 of Act make up over 95% of the Agency’s definitive 31/1990 on the 1991 National Budget, is forecast revenues. The rest of the income found by multiplying this collected amount by budget comes basically from charges and a percentage that is set each year in the other revenues. National Budget. In application of article 18 of Act 52/2001 on the 2002 National Budget, In fiscal 2003 a total of 1,093,291,000 euros the percentage for 2003 is 5%, and for the in revenues were applied to fund the first time a limit is set on this income, which Agency’s budget; the bulk of that, cannot be in excess of 50 million euros. 1,040,093,000 euros, was provided in the form of current and capital transfers.