Spanish Tax Agency publishes its Tax Control Plan

The Spanish tax authorities have published the Tax Control Plan (Plan de Control Tributario) for 2024. The plan sets out the main guidelines that the Spanish Tax Agency (AEAT) will follow during the year to pursue tax irregularities and improve compliance with tax obligations.

This year, the control plan has a clear digital component and will be marked by increased scrutiny of new business models and the digital economy. In fact, beyond e-commerce and activities carried out over the Internet, the tax authorities intend to focus on the new cryptocurrency returns that will be filed for the first time this year with 2023 data.

Types of business and activities the tax authorities will scrutinize most in 2024

Throughout 2024, tax officials and inspectors will maintain a presence in those sectors and business models in which a high risk of underground economy is detected. They will pay special attention to the intensive use of cash and to the use of electronic payment methods based abroad that avoid information reporting obligations.

In addition, officials will scrutinize the use of cash above the maximum amounts permitted by law, which since 2021 has been €1,000 for transactions between professionals.

To this end, as explained by the Tax Agency, coordinated actions will be stepped up, focusing on self-employed workers and businesses that meet any of the following characteristics:

• They do not accept payments through banking channels.
• Their income is derived from supplies of goods or services provided directly to the final consumer, since this increases the risks and the lack of control over payment methods.

• Their third-party signs of wealth, assets, profitability, or financial information are incoherent or inconsistent with the income reported.

Self-employed sectors with the highest use of cash

Many businesses, some of them run by self-employed workers, may be affected by this type of action by the tax inspectorate. Examples of these activities include:

• Retail
• Restaurants
• The services sector
• Real estate activities.
• Renovations and repairs.
• Construction.

Small businesses reporting losses for several years

Furthermore, as regards commercial companies, the Tax Agency has for years paid close attention to businesses that report losses for several tax years.

Once again, the tax inspectorate will focus on all cases involving negative tax bases or tax credits, whether at the level of the tax base or of the tax liability, that are pending offset or application.

Continued on-site visits and monitoring of false invoices

In the area of the underground economy and concealment of activity, entries into the registered offices of businesses, with the corresponding administrative or judicial authorization, will also continue.

Attention will also focus on entities artificially created to issue false invoices and on assets concealed behind the activities of foundations.

Promotion of voluntary compliance and fraud prevention.

As a priority, the Tax Agency will continue the work begun in 2023 to clean up the tax register of non-commercial entities, in particular foundations, cooperatives, and associations, at both national and regional level, by cross-checking it against the corresponding national and regional registers.

Likewise, the Permanent Comprehensive Census Rectification Plan will be promoted in order to monitor census-related risk situations when new taxpayers register and to give them greater attention from the outset.

Tax fraud

The Tax Agency obtains information mainly from the information returns filed by taxpayers, international exchanges of information (both automatic and on request), and other sources of information. In this regard, since this information is used to monitor and assess potential tax risks, each year the Tax Agency seeks to improve the planning and selection of control actions and the analysis of the risks detected regarding taxpayers (obligados tributarios).

As regards audits of multinational groups, large companies, and tax groups, the AEAT will continue to ensure the effective application of the anti-avoidance measures of the BEPS Project. Accordingly, it will continue to review transfer pricing in multinational groups, with special attention to business restructurings, the valuation of transfers, and the intragroup assignment of various assets.

As regards wealth and corporate analysis, the authorities will scrutinize taxpayers who, while actually residing in Spain, fictitiously locate their residence in other territories. They will also scrutinize foreign nationals who establish their habitual residence in Spain but continue to pay Non-Resident Income Tax (IRNR) on their Spanish-source income. Likewise, in coordination with the regional tax administrations, they will examine simulated tax residences used to take advantage of lower taxation in certain Autonomous Communities (regions).

As regards the concealment of business or professional activities and the abusive use of companies, throughout 2024 the Tax Agency will pay special attention to companies controlled by an individual or a family group. The aim is to assess their operations as a whole and to prevent tax irregularities such as the improper reduction of the tax properly due on the activity carried out or the shifting of tax bases to legal entities subject to lower tax rates.

Other actions to be carried out in 2024

Beyond the actions aimed at combating tax fraud, the Tax Agency will, as every year, focus on implementing mechanisms to improve compliance, such as its traditional warning letters and the improvement of taxpayer assistance tools.

Simplification of language

Having promoted in 2023 the simplification of the language of the documents most frequently used in its dealings with taxpayers, the Agency will also continue along these lines with other documents, such as payment deferral decisions and enforcement orders (providencias de apremio).