The Immediate Information Supply system and the new reporting of financial accounts will be key pillars of AEAT's fight against fraud

The use of information provided by the SII and the CRS, together with the consolidation of other sources introduced in recent years (form 720 on assets and rights abroad, analysis of information declared in form 750, and the FATCA Agreement affecting Spanish residents holding accounts in the USA, among others), form part of an integrated strategy which will represent a major step forward in the exploitation of information through the intensive use of data analysis technologies.

The sum of this technology and the new sources of information open up a scenario in which concealment will be more difficult and the detection of fraudulent practices easier. Thus AEAT's tax control strategy is aimed at improving voluntary compliance by taxpayers and broadening and consolidating their declared taxable base.

Significant assets and concealment of activity

The information from the CRS will be especially useful for the detection of income and assets hidden abroad by the very wealthy. In this area of control, inspections linked with the new IT taxpayer selection tool have already begun. The tool was created last year to analyse the value of the real wealth of natural persons possessing significant assets, and to make it easier to identify their associated tax risks.

Throughout 2018, control will be stepped up, based on over 50 tax risks predefined by the new taxpayer selection tool, and focusing on cases that present significant signs of opacity or offshoring, In addition, investigation activity will continue to be essential to the detection of earnings and assets concealed in tax havens or territories with information exchange restrictions, and for the location of assets and rights in Spain in cases of simulation of tax residence abroad.

Meanwhile, the implementation of the SII will facilitate control over business and professional activities which are totally or partly concealed. This will be an additional source of ongoing information on commercial transactions which will strengthen the control strategies already in place in the fight against the informal economy, such as coordinated entry and search operations with computer auditing units, or the detection of external signs of wealth.

Multinationals and large companies

The first exchange of information on the basic magnitudes of the activity of multinational groups worldwide, delivered through Country-by-Country reporting (CbC) in June 2018, will enable us to optimise the risk analysis of these major groups in order to detect, regularise and rectify tax avoidance practices.

In parallel, the AEAT will continue to correct the tax avoidance practices of multinationals in accordance with the OECD's BEPS (Base Erosion and Profit Shifting) risk areas in such matters as the abusive use of transfer pricing policies (intragroup) or aggressive tax planning structures. The AEAT will also step up the detection and regularisation of permanent establishments belonging to non-resident entities which have instrumental operating structures in Spain.

Analysis of new business models

Online investigation and the acquisition of information related to new business models continues to be a priority for the Tax Agency, not only for the purpose of ensuring equitable taxation, but also to prevent discriminatory practices with respect to traditional ways of doing business.

In this regard, special attention will be paid to new online service provision and distribution models, information systems will be modified to take into account the growth of payment systems such as e-purses and instant transfers, and control will be maintained over manufacturers and providers of online services.

Added to all the above are the other controls that the AEAT traditionally considers a priority, in such areas as VAT and hydrocarbons fraud, the artificial division of business, or the use of front men and ghost companies.

In the case of foreign trade, action will be taken on the re-assessment of the conditions of access to the status of Authorised Economic Operator, and of authorisations for the application of simplified customs procedures. Combined checks and investigations will be set up regarding the import of consumer products, textiles, and other goods from Asia.

Clampdown on smuggling and money laundering

Regarding the clampdown on smuggling and drug trafficking, special attention will be paid to strengthening material resources and control measures in the Strait of Gibraltar area, and regulatory measures will be considered aimed at limiting the use of high-speed vessels of the kind regularly used by drug trafficking organisations.

The fight will also be stepped up against the smuggling of drugs into ports by organisations which make use of legal sea freight container traffic. And control will be increased over all the links in the chain of the illicit trade in tobacco, especially in the case of contraband chopped tobacco leaf, in order to detect illegal operations and expedite investigations into criminal networks.

Meanwhile, the Tax Agency's investigation units will step up their use of new information gathering and analysis technologies in all types of open networks in order to stem the use of the so-called deep web and cryptocurrencies by organised crime involved in the traffic and trade of all kinds of illicit goods.

Knock-on effect on tax collection

As regards Tax Collection, the Tax Agency's strategy will be to leverage the knock-on effect of enforced collection management, with the aim of encouraging spontaneous compliance by taxpayers. In 2018, another of AEAT's priority actions will be the systematic control of major tax debtors, and the exhaustive and ongoing investigation into their assets.

AEAT also intends to ramp up the use of information provided by the SII, since the immediate nature of that information will enable the agency to increase the efficiency of seizures and any subsequent monitoring. Similarly, as in previous years, the Tax Collection Department will make greater use of precautionary measures, derivations of liability, and asset investigations to ensure the collection of tax debts, and will permanently monitor defaulters in order to continue reducing outstanding debt, especially debt in the seizure stage of collection.

Non official translation