The Treasury will tighten the fence on taxpayers who say they live abroad. And it will do so through one of the most fashionable technologies: the big data. This follows from the 2021 Annual Tax and Customs Control Plan, whose general guidelines have been published this Monday in the State official newsletter (BOE). The Tax Agency will use massive data processing to verify that Spaniards who say they have left Spain really have tax residence abroad.
The publication of the Agency’s guidelines comes amidst controversy over the transfer of youtubers to Andorra to pay less taxes. The Rubius has been the last influence in announcing that it will move to the microstate, until a few years ago considered a tax haven both for Spain and for several international organizations due to its banking secrecy. Although the creator of digital content assured that the decision to move has nothing to do with money, he also added that the more lax tax rate that Andorra has is “a plus” for him.
The Treasury emphasizes that “the special characteristics” of the wealthiest taxpayers, who have more capacity and make more use of fiscal engineering, “require the use of sophisticated analysis mechanisms to investigate and understand complex financial and corporate frameworks.” For this reason, the Tax Agency has been developing specific IT tools, based on the processing of the big data, to “determine the net worth of citizens, their global income flows and their family, economic and corporate relationships.” In other words: check if a taxpayer really lives abroad and does not have to pay taxes in Spain.
To change the tax residence it is not only necessary to live more than 183 days (half of the year) abroad. The regulations that regulate income tax also take into account where the relevant and operational center of economic interests is – for example, the company headquarters where the taxpayer is the owner, bank accounts, etc. … – and the closer family relationships.
The Treasury ensures that the result of the checks carried out through the massive use of data will be reflected in the development of verification files that will begin in 2021. “The analyzes developed through this new tool facilitate the tax inspection execution of the tasks necessary to know in an agile and efficient way the indications of residence, which will allow intensifying during this year the control actions of relocated citizens who have a relevant level of assets or income ”, clarifies the Annual Tax Control Plan and Customs approved for this year.
Surveillance of businesses least hit by the crisis
The coronavirus pandemic and the restrictions imposed to limit infections have been a setback for economic activity, which, however, have not punished all businesses equally. While sectors such as tourism or hospitality have suffered the biggest blow, other activities, many of them digital, have withstood the gale and have even improved their performance. And that is where the Treasury wants to put the magnifying glass.
The tax control plan indicates that the Agency plans to evaluate “with a higher level of priority” those activities of multinationals and large companies that have been less affected by the crisis unleashed by covid-19. Although it does not offer a detailed list of the sectors on which it intends to tighten the fence, it does expressly mention the digital business: “Especially in 2021, the Tax Agency plans to increase actions in those digital activities that, in the current context, may present a greater tax risk ”.
The Treasury indicates that these checks will be aimed at finding out that the financial expenses deducted by the companies that are taxed as a group are correct, and that the interest and dividend payments are verified. It also adds that throughout this year “a significant number of multilateral controls” will be carried out within the EU to analyze intra-group payments for the transfer of intangibles, and the development of the new automated risk analysis system will be completed. in transfer prices, which will be strengthened thanks to the implementation of the DAC 6 directive that obliges intermediaries to report on aggressive tax planning.
Likewise, the Tax Agency will reinforce in 2021 the measures to control the activity carried out through electronic commerce, which has experienced a boost since the declaration of the first state of alarm in March last year. In this sense, the Treasury indicates that the Google it can help determine the true scope of activity of large digital platforms. This tax, which came into effect on January 16, still lacks regulatory development so that de facto be collected. Therefore, the Government has decided to postpone the first settlement to the second quarter.
“This should not prevent the continuation of the review of compliance with tax obligations for all taxpayers,” the document states, “either because individually they have managed to maintain their economic situation with better success than their direct competitors, or because the risks “old trailing advises to carry out verification actions”.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.