The accounting inspection of taxpayers under debate

On 13 March, the Official Gazette of the Congress of Deputies published the amendments to the Draft Law amending Law 58/2003, of 17 December, on General Taxation, in transposition of Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation.

The aim is to give the Tax Agency the capacity to analyse accounting data in limited audits, something it can do in ordinary inspections, but which in these procedures it was “vetoed”.

The authors of the proposal argue that the socio-economic development experienced by this country since the approval, almost twenty years ago, of Law 58/2003, of 17 December, on General Taxation, advises an evolution of the possibilities of carrying out tax controls in an agile and efficient manner in relation to situations of a certain degree of complexity.

Furthermore, according to the partners in government, these circumstances may be giving rise to a lower degree of de facto control of certain sectors or groups of taxpayers in relation to the average taxpayer, which would constitute discrimination from the point of view of tax justice.

With this in mind, the aim is to modify the regulation of the limited verification procedure, in such a way that, while maintaining the limitation of the Administration’s powers in the area of tax management, an increase in these powers is envisaged.

Verification limits

The amendment, however, limits the capacity of the Tax Agency in this type of verification in the modification of paragraphs 2 and 4 of Article 136 of the LGT, which are worded as follows:

1. In this procedure, the Tax Administration may only carry out the following actions:

a) Examination of the data entered by the taxpayers in their tax returns and of the supporting documents submitted or required for this purpose.

b) Examination of the data and background information in the possession of the Tax Administration that reveal the fulfilment of the taxable event or the budget of a tax obligation, or the existence of elements determining the same that have not been declared or are different from those declared by the taxpayer.

c) Examination of the registers and other documents required by tax regulations and of any other official book, register or document, as well as the examination of the invoices or documents that serve as proof of the transactions included in said books, registers or documents.

Examination of the accounts shall be limited to verifying that the information contained therein is consistent with the information in the possession of the tax administration, including that obtained in the procedure.

Examination of the accounts shall not prevent or restrict subsequent verification of the transactions to which they relate in an inspection procedure.

d) Requests to third parties to provide information and supporting documentation in order to verify the veracity of the information held by the Tax Administration, including that obtained in the procedure.

2.The limited verification procedures may not be carried out outside the offices of the tax administration, except for those that are appropriate, in accordance with customs regulations or for the examination of accounts, or in the cases provided for in regulations for the purpose of carrying out census verifications or those relating to the application of objective methods of taxation, in which case the officials who carry out these procedures shall have the powers recognised in sections 2 and 4 of Article 142 of this law.

Finally, it only remains to note that the Tax Agency may require third parties to provide information and supporting documentation in order to verify the veracity of the information held by the Tax Administration, including that obtained in the procedure.

Collaboration

Taxpayers must attend to the Administration and provide due collaboration in the performance of its functions.

The taxpayer who has been summoned must appear at the place, date and time indicated for the proceedings to be carried out, and must provide the documentation and other elements requested.

DAC Directive 7

The accounts must be examined at the taxpayer’s home, premises, office, or premises of the taxpayer, in the presence of the taxpayer or the person designated by the taxpayer, unless the taxpayer consents to their examination in public offices. However, the tax administration may examine copies of the accounts on any medium at its offices (Proposed amendment to Art. 138.2 of the General Tax Law).

The main objectives of Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC 7) are as follows:

• Improve the existing framework for information exchange and administrative cooperation in the European Union,
• extend administrative cooperation to new areas in order to address the challenges posed by the digitalisation of the economy, and
• help tax administrations to collect taxes in a better and more efficient way (including digital platform operators).

Beyond generic purposes, do not forget “the intention” that now occupies us: The transposition of the DAC 7 in Spain can open the door of your accounting to the Treasury.

If you have any doubts on this subject, please do not hesitate to contact us, by telephone to Carles Monfort Codina or by e-mail to cmc@btsasociados.com, we will be delighted to help you.