Indicated in the General Tax Law (hereinafter LGT) as a formal obligation, the duty to provide information of a tax nature to the Administration when so requested, is perhaps one of the most relevant powers on which the Spanish tax system rests, as it is structured. currently.
Said obligation concerns not only taxpayers, liable for any type of tax, but also other subjects who are not debtors of the same, so that we all contribute to the maintenance of public spending, as indicated in the Spanish Constitution.
However, the main problem facing the Spanish tax system in relation to the obligation to provide information to the Administration is that it must seek a balance between the obligation to support public spending by the State and safeguarding the rights inherent to any taxpayer. And this is not always easy.
For this reason, it is necessary to delimit and set limits to the obligation to provide information by taxpayers to the Tax Administration. This means leaving out of place the contribution of any type of information indiscriminately.
In other words, you should only request and provide information that may be transcendental for tax purposes and leave aside all that is not necessary for the purpose pursued by the Administration, because if this were not the case, data would have to be provided indiscriminately, leaving citizens vulnerable and deprived of privacy.
But where do the limits lie in terms of providing information? Some are clear, but others are being more difficult to delimit. Let's see some examples. In Spain, the legislator has tried to limit the information that must be provided to the tax authorities in article 93 of the LGT. Said article indicates that all physical, legal, public, private persons and entities without legal personality are obliged to provide information with tax implications. That is, then, one of the limits: relevant tax information must be provided, which leaves aside all that is not. But it is that even the tax-relevant information that must be provided to the Administration must be delimited, avoiding having to provide any type of tax information in a generic or indiscriminate manner.
The latter is known as "fishing expedition” or cast the nets. This method of obtaining information consists of making generic requests for tax-relevant information to all those entities that may have it in order to try to obtain evidence of tax fraud. That is, go “fishing” for any type of tax information.
El fishing expedition” is not allowed in Spain because, although article 93 LGT emphasizes the obligation of general collaboration of any entity, the information that must be delivered must be well defined, adjusting to the purpose pursued by the Administration.
Not even the international community itself allows the "“fishing expedition” as far as the exchange of tax information between countries is concerned. Thus, in the article relating to the exchange of information in the latest version of the OECD model Convention on Income and Assets, the expression in section one is modified "the competent Authorities of the Contracting States shall exchange the necessary information for the application of this Agreement” (this section can be seen in the Agreement to avoid double taxation signed between Spain and Brazil in 1975) to change it to the expression “The competent authorities of the Contracting States will exchange information that may foreseeably be of interest to apply the provisions of this Agreement” (seen in the Agreement signed between Spain and Azerbaijan in 2014).
This change of expression sought, in the words of the OECD, "to guarantee the collection of information as broad as possible, but specifying that no State can go fishing for information with total freedom, or request information from any taxpayer that may be of doubtful relevance".
Fortunately, it is evident that not everything goes to comply with the support of public spending.
To finish the article with an example of those cases in which the limit between delivery of information and protection of taxpayers' rights is not clear, in Spain lawyers are obliged to inform the tax authorities about "aggressive" cross-border tax planning. ” of your customers. This obligation was determined by Council Directive 2011/16/EU of February 15, 2011, but it has been the Court of Justice of the European Union itself that has now determined that this practice violates professional secrecy between lawyer and client, in his judgment of December 8, 2022 (case C-694/20). Of course, the rest of the intermediaries will continue to be obliged to report on this.
Thus, as has been verified, the fine line between the duty to provide information to the Administration to support public spending and the protection of the rights of any taxpayer is not always clear and is constantly changing to try to obtain a balance that It doesn't seem like it's always reached. The only thing that is clear is that, in the future, that balance will continue to be sought.
Martha Gallego
Associate Tax Area at Tomarial Lawyers, Economists and Consultants
