The Spanish Tax Agency approves Guidelines of the General Tax Control Plan for 2024

The Guidelines of the General Tax Control Plan for 2024 (the Plan) have been approved by the General Directorate of the Spanish Tax Agency and published in the Official State Gazette. The Plan sets forth the most relevant actions that will be taken during 2024 under the new framework of the Tax Agency’s Strategic Plan for 2024-2027.

Fiscal year 2024 is the first year under the umbrella of the new Strategic Plan that will be in force until 2027. Although the list is extensive, we expect that transfer pricing and the generation of tax credits under EIG structures will be on top of the list for the Spanish tax authorities.

The Plan is divided into five different sections. In this summary we take a look at the third section, dealing with investigation and verification of tax fraud, and especially regarding focus topics for MNEs, large businesses and tax groups.

 

Base Erosion and Profit Shifting (BEPS)

According to the Plan, tax procedures will focus on verifying that tax rules approved or enhanced as a result of the OECD BEPS Action Plan are respected and sufficient to avoid elusive conducts. Such rules are those regulating hybrid mismatch arrangements, CFC (Controlled Foreign Company) legislation, deductibility of financial expenses and treaty shopping.

 

Transfer Pricing

Transfer Pricing is again a focus area in 2024. The Tax Agency has been carrying out different procedures to manage and control MNEs’ transfer pricing policies, such as MAPs or APAs, under the framework of the so-called 360º strategy. This 360º strategy is maintained, having at its core an automated system for the analysis of transfer pricing risks, based on all the data available both locally and through international exchange of information.

Due to their relevance, the Spanish tax authorities will focus especially on reorganizations, valuation of intra-group transfer of assets, in particular intangibles, and base-eroding payments, such as royalties, intra-group financial transactions and recurring losses.

 

International Taxation

As a result of the entry into force of Law 13/2023, of 24 May, implementing DAC7 in Spain, it is expected that the instruction of joint audits will increase during 2024.

Focus topics for the current year in the field of international taxation are withholding tax on dividends, interest and royalty payments. Assessing the beneficial ownership structure in those types of cross-border payments will be a priority.

 

Tax groups

The priority area for the Spanish tax authorities in year 2024 is the analysis of tax credits, specifically technological innovation (TI) and their generation under Economic Interest Groupings (EIGs). Verifying the perimeter of tax groups will also be high on the list.

 

Value Added Tax

Apart from other expected areas of focus, the Spanish tax authorities will keep an eye on abusive structures used to deduct input-VAT, such as those reviewed by the Advisory Commission in recent reports for declaration of conflict in the application of the tax rules.

 

Corporate Income Tax

The use of EIGs as a vehicle to channel tax credits is the key area of focus in 2024. Special attention will be paid to abusive or simulated structures, and the artificial increase on the amount of those tax credits. It is expected that tax audits will be extended to cover the relevant investors.

Spanish REITs (SOCIMIs) will also be on the radar in 2024. The Spanish tax authorities will control the fulfillment of investment and dividend distribution requirements.

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