Spanish Tax Agency Releases 2018 Tax and Customs Control Plan

Tax Insights from Tax Controversy and Dispute Resolution

Spanish Tax Agency releases 2018 Tax and Customs Control Plan

February 8, 2018

In brief On January 8, 2018, the Spanish Tax Agency published the general guidelines of the 2018 Tax and Customs Control Plan through the Official Bulletin of the State, with a specific focus on efforts to avoid tax evasion.

The general guidelines are based on four main pillars: (i) tax and customs fraud prevention through access to increased information; (ii) enhanced investigations of tax and customs fraud through new data analytic and technology tools; (iii) focused mechanisms to control tax and customs fraud in the collection phase; and (iv) increased collaboration between the Spanish Tax Agency and regional tax administrations.

In detail and make it easier to detect Spanish Tax Agency is fraudulent conduct of taxpayers. specifically focused on With effect from 2018, the identifying and correcting tax Spanish tax authorities will have The Spanish Tax Agency has avoidance practices of access to two new sources of also initiated inspections multinational companies in information: (i) Immediate through a new taxpayer certain key areas identified by Supply of Information (SII) for selection tool to determine the the OECD’s Base Erosion and VAT purposes, and (ii) financial real value of taxpayer assets and Profit Shifting initiative, such as account information obtained associated tax risks, which the abusive use of transfer from certain jurisdictions under includes more than 50 pricing policies or aggressive tax the Common Reporting predefined fiscal risks. Through planning structures, as well as Standard (CRS) project such means, the Spanish Tax boosting the detection of developed by the OECD. Agency seeks to identify permanent establishments of economic activities that may be The use of information obtained non-resident entities that have completely or partially instrumental operating through SII and CRS as well as concealed. other sources — such as data structures in Spain. reported on Forms 720 and 750 Multinational companies Analysis of new business and through the Foreign From June 2018, key elements models Account Tax Compliance Act of the financial statements of The Spanish Tax Agency is keen agreement with the United multinational companies will be to recognize new business States — will lead to a reported on the Country-by- models of economic activity and significant focus on data Country Report, which also will the tax effect. In this respect, analytics and the use of help the Spanish Tax Agency to special attention will be paid to innovative technology. In turn, detect potential tax avoidance the supply of services and this will enhance investigations practices of taxpayers. The

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distribution of goods using electronic collection efforts. The adoption of collection means), reviewing the means, including new mobile payment precautionary measures, liability overall structure of a multinational systems. referrals, and property investigations group as well as individual will also strengthen the collection of transactions, with an eye toward the Revenue collection tax debts. tax liabilities of not only Spanish The systematic control of large entities, but also other entities within debtors will be a priority action of the The takeaway a multinational group and the view of Spanish Tax Agency as well as an In light of these developments, corresponding tax administrations. exhaustive and permanent taxpayers should analyze the investigation of their assets in information to be reported through collaboration with regional tax the SII and CRS (and other tax administrations to increase revenue

Let’s talk

For a deeper discussion of how this issue might affect your business, please contact:

Tax Controversy and Dispute Resolution

Javier González Carcedo Alberto Monreal Lasheras Antonio Puentes Moreno +34 915 684 542 +34 915 685 750 +34 915 685 541 [email protected] [email protected] [email protected]

Manuel Bouzas Fernández Adal Salamanca Cabrera +34 915 684 318 +34 915 684 649 [email protected] [email protected]

Tax Controversy and Dispute Resolution Global Leader David Swenson, Washington DC +1 202 414 4650 [email protected]

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