Control of fraud by false non-residents

Fraude de los falsos no residentes

If you are actually Spanish tax resident but you declare Non-Resident Income Tax (IRNR), be careful, because the Tax Agency has decided to reinforce the control of fraud by false non-residents. To this end, this year it will intensify the control of residents in Spain who artificially lower their tax bill by declaring Non-Resident Income Tax (IRNR), given that in addition to having lower tax rates than in Personal Income Tax, in this way they are only taxed in our country on the income generated there, instead of having to declare all their worldwide income.

The Annual Tax Control Plan consists of maintaining the control activity in cases of simulated residence in Autonomous Communities other than the real one, as well as the use of the information available on real owners of opaque companies with high-level residential properties. Similarly, specific plans will be implemented in relation to the indirect ownership of real estate by non-residents, for the purposes of correct taxation of their assets.

New information and assistance model, and new appointment application

A new information and assistance model will be implemented in which most services are provided through all channels and the citizen decides how he/she wants to be attended to, depending on the type of service and the resources available.

To this end, a complete charter of the services provided by the Agency and the assistance channels available for each of them will be defined. The list of services will be accompanied by a new electronic appointment application that will use a more comprehensible language and improve its usability.

Work will also be done to strengthen and improve face-to-face assistance for the elderly or people who may be affected by the digital divide.

In the area of fraud prevention, the intention is to continue reducing the number of non-filers of Personal Income Tax by means of warning campaigns during the tax return period, or the early control of the entry of new taxpayers in the tax census and, in particular, in the case of entities effectively controlled by taxpayers with reproachable tax conduct in the past, which will be monitored to prevent possible future tax non-compliance.

Another of the new developments planned for 2023 is the review of penalty procedures, especially in cases where self-assessments are filed without late payment, which do not cause economic damage to the tax administration.

Electronic payments and digital economy

Actions will be reinforced in relation to holders of economic activities that make use of ‘virtual payments’, and specifically with the use of electronic payment methods based abroad through entities that do not participate in the national obligations to provide financial information.

The aim will be to: 

– obtain information, in the framework of EU rules, on digital payments made through entities or applications whose head office and servers are located abroad.

– investigate the use of virtual currencies with a view to enhancing the tracing of crypto-assets liable to seizure.

– on the part of the Customs Surveillance Service, develop an investigation plan associated with the use of cryptocurrencies in the digital economy in order to detect assets whose origin may be linked to criminal activities.

International taxation

Control over the tax risks arising from the mispricing of related-party transactions in multinationals will be reinforced with joint inspections between several tax administrations, and complemented by a search for long-term compliance through the signing of pre-assessment agreements.

The focus will also remain on identifying structures and patterns of behaviour that unduly benefit from the low taxation of certain territories, tax regimes or structures, and which are or could be replicated or standardised for use by a plurality of taxpayers.

Fight against the black economy

The control of sectors and business models in which there is a high risk of the existence of the underground economy will be reinforced. Thus, the traditional tax visits will be promoted in relation to multiple sectors, although with a special focus on activities related to the construction, rehabilitation and refurbishment of real estate.

In the framework of the new regulation on the prohibition of sales concealment software, specific plans will also be deployed to identify the management and accounting software tools used by businesses and companies and to verify the consistency of the software with the applicable regulations.

Undue use of tax credits

The Tax Agency will again focus on the verification of negative tax bases, tax credits in base or quota pending offsetting or application.

Of particular note is the analysis of structures such as Economic Interest Groupings in those cases in which they have served as vehicles for transferring and marketing tax benefits to third party investors. This analysis and verification will be extended to the participants or partners of the interposed entities and special attention will be paid to the serial sale of these structures for taking advantage of tax benefits, when they deviate from the law, are clearly abusive or are based on simulated or artificially inflated factual assumptions.

In any case, the Agency will ensure that the application of the deductions foreseen in the Corporate Income Tax are linked to the development of real activities aimed at the purposes foreseen in the regulation, as well as that the amounts that have been applied as the basis for the deduction correspond to the expenses actually incurred in their execution, avoiding abuse in the possible transfer of tax benefits to the financiers of the activities that the regulation intends to promote.

Joint investigations and the European Public Prosecutor’s Office

Both for the VAT fraud area of the National Fraud and Investigation Office, the ONIF, and for investigations into the most serious customs fraud, all the possibilities offered by the creation of the European Public Prosecutor’s Office, a supranational criminal prosecution body that is making real progress in carrying out joint investigations with other EU countries, will be promoted.

Suppression of smuggling and drug trafficking

In relation to the prevention and repression of smuggling, drug trafficking and money laundering, during 2023 the Tax Agency’s Customs Surveillance Service will develop actions aimed at neutralising organised criminal activities, acting comprehensively against the logistical, financial and asset structures of criminal networks.

In the fight against smuggling and drug trafficking, work will be carried out on the implementation of new technologies to monitor and detect anomalous behaviour by vessels involved in illicit trafficking by sea. At the same time, operational activity will continue in relation to the supply chain of ‘narco-boats’ and, in the case of the irregular tobacco trade, progress is expected in the area of prevention based on the development of control regulations on raw tobacco and its sanctioning regime.

In the area of protection against unfair or illicit trade, the possibilities of applying advanced data analysis tools to the world of detection of smuggling in postal parcels will be explored.

Fraud control in the collection phase

Along with the extension of collection risk analysis to new manifestations of wealth, the 2023 Guidelines underline the importance of strengthening international cooperation for the recovery of tax claims by further exploiting information exchanges with other administrations and improving tools for targeting debtors with signs of wealth abroad, especially within the EU.

At the same time, permanent priorities are maintained in the area of tax collection, such as taking precautionary measures to avoid the emptying of assets, the adoption of liability derivations to ensure the effective collection of debts, or the monitoring of debtors convicted of crimes, and the use of advanced data processing and analysis tools will also be strengthened, especially in the area of large debtors, in order to quickly and efficiently detect complex patterns of collection fraud on which to focus and direct actions.

Contact us if you have any doubts about this news!

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