The Contentious-Tax Area of Tomarial Lawyers, Economists and Consultants is reinforced to respond to a growing need of companies. Because year after year the checks and inspections of the Tax Administration increase "and we have to attend to more procedures in this department, which has a very high success rate", as explained by the partner in charge of the Tomarial Prosecutor, Miguel Angel Molina. Together with the director of the Tax Procedures Area, Raphael Donet, leads a section of the firm that is on the rise due to the multiplication of tax disputes in Spain.
We reproduce here the interview with both published by Valencia Plaza:
– Why is the Contentious-Tax Area reinforced?
– Since its creation in 2017, the Tomarial tax procedures department has not stopped growing, both in volume of cases and in billing figures. It is a service that we are reinforcing now with the incorporation of more specialized professionals because there is a demand from our clients. This is undoubtedly due to the progressive increase in control actions by the Tax Administration: there is an ever-increasing number of checks, inspections, settlements and penalties. But there is also another factor: the corrective decisions of the courts of justice in matters such as the unconstitutionality of municipal capital gains, the sanctioning regime of model 720 relative to the obligation to inform about goods and rights abroad, fiscal discrimination of non-residents, exemption in the maternity benefit, entries in the taxpayer's home and a long etcetera. There are rulings that correct the actions of the Tax Agency and open the door to taxpayers' claims.
– By what percentage have the control procedures of the Tax Agency increased?
– You just need to take a look at the results report for the 2021 financial year published by the Tax Agency. It can be verified that last year almost 1,8 million internal tax control actions were carried out, the vast majority of them being verification actions (1,7 million). In both cases, they represent a year-on-year growth of 10% compared to 2020 and 9% compared to 2019. This inevitably gives rise to more settlements and sanctions that can be appealed. Because let's not forget that a significant percentage of these actions are subsequently annulled by the courts and that is the key to our Contentious-Tax Area: that it has a very high success rate. In the case of the acts dictated by the autonomous administrations, the percentage of annulment exceeds 60% in the economic-administrative way; that is, without going to court. In the case of the acts dictated by the State Tax Administration Agency (AEAT), we would be talking about a percentage close to 30% as a whole and almost 50% in the case of sanctioning files.
– Can we talk about massive procedures?
– If we look back some ten years, we can see how the AEAT's verification actions have nothing to do with the current ones, both in quantity and content, as a result of the ever-increasing means available to the AEAT to your checks... Only with regard to VAT checks, the increase is almost 100%. We cannot forget that the Tax Agency has more and more human resources and a powerful information system that allows it to detect points of risk and fraud that must be verified. For example, VAT deductibility in the acquisition of goods and services related to a business activity, hidden sales, business groups, related operations, cross-border operations, etc. In any case, it is also noteworthy that a high percentage of tax disputes are won due to formal defects in the procedure.
– Is it foreseeable that inspections will continue to increase?
- Definitely. The current situation of public deficit, runaway inflation and the commitments made with Brussels portend more than a tightening of control actions. Because that is the way that allows an increase in collection through fraud control and prevention actions. It is enough to read the annual tax control plan of the AEAT every year, where an "intensification" in control actions is always highlighted. And neither can we forget the latest legislative changes, which allow the Tax Agency to check a greater number of operations without having to resort to the Inspection, for example in terms of business reorganizations covered by the tax neutrality regime.
– What do you advise regarding liability derivations?
– In the internal memory of the AEAT it is observed that the procedures for derivation of responsibility have practically doubled in the last ten years, especially against the administrators of companies that urge the bankruptcy. There is still a certain stigma in applying for the contest, so sometimes you arrive late, with a very delicate financial and patrimonial situation. This may imply that, in case the tax obligations cannot be met, the Tax Agency derives the responsibility against the administrator in order to collect the debt. It is recommended that, at the slightest sign of insolvency in companies, administrators seek advice and anticipate to take advantage of the new bankruptcy legislation and avoid greater evils: action must be taken beforehand to have greater room for manoeuvre. In general, we always recommend specialized advice and anticipation of problems to companies. Tomarial, in its legal department, has a team of lawyers specialized in these matters that can accompany clients who are going through financial situations that require taking measures before reaching situations that may be irreversible.
