- The 1 February BOE published the guidelines of the 2021 Annual Tax and Customs Control Plan.
- Priorities include large estates, fictitious tax residence and cryptocurrency transactions.
- Related-party transactions, e-commerce and the new cross-border tax planning disclosure regime will also be monitored.
On Monday 1 February 2021 the BOE published the resolution of 19 January of the Directorate-General of the State Tax Agency approving the general guidelines of the 2021 Annual Tax and Customs Control Plan. The full plan is confidential, as the General Tax Law provides, but the guidelines made public show where this year’s audits and assistance and prevention actions will be directed.
The text starts from a 2020 conditioned by the pandemic and announces reinforced electronic and telephone assistance, voluntary compliance and the fight against more complex fraud. For business owners and families it is useful reading because it shows which risk profiles are considered a priority and what information the tax agency already receives without the taxpayer providing it, from foreign accounts to digital platforms.
Large estates and residence
The guidelines restate the interest in people with significant estates. Within the National Fraud Investigation Office there is a central unit coordinating this control, which will keep applying data-based selection techniques to taxpayers of high or very high economic capacity. Special attention is paid to assets located abroad and to interposed corporate structures that make it hard to know who the final owner is.
On residence, the plan announces that cases of taxpayers who appear as non-residents in the tax databases will continue to be analysed with big data, and that fictitious moves abroad will be investigated. The automatic information that arrives from other countries on financial accounts, known as CRS, feeds these analyses. For anyone changing tax domicile, what matters is that the change is real and well documented.
Cryptocurrencies and the digital economy
The text states that the rise of virtual-asset markets creates tax risks requiring specific action. For 2021 it plans to gather information from several sources on cryptocurrency transactions, systematise it to check proper taxation and the origin of funds, and move towards including it in the form for assets and rights abroad and towards a reporting obligation of its own.
On e-commerce, the guidelines recall that the digital services tax and the financial transactions tax come into force this year, and announce a package of changes to VAT on online sales. They plan to obtain information from platforms that intermediate between businesses and consumers and to make it easier for non-resident operators to register. Companies selling online should review their VAT compliance with particular care.
Related parties and companies
Among the planned campaigns is the check of reporting obligations on related-party transactions, which since 2016 have been declared on form 232, and the development of an automated risk-analysis system for transfer pricing. OECD guidance on applying the arm’s-length principle in the pandemic will be taken into account, and taxpayers in the sectors least damaged by the crisis will be examined with higher priority.
In inspection visits, the plan mentions verifying the correct use of property owned by companies, the control of commercial leases and the census status of activities. As a novelty this year it also covers information received on cross-border aggressive tax planning arrangements reported under the directive known as DAC 6. It is worth reviewing with your adviser the documentation of transactions between group companies and between shareholders and company.
A confidential plan, but with public priorities: the best preparation is to have the documentation in order before the tax agency asks for it.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
