The Spanish Tax Audit Plan for 2024

On 29 February 2024 a resolution, dated 21 February 2024, of the Spanish Tax Administration Agency, was published in the Spanish Official Gazette approving the general guidelines of the Annual Tax and Customs Audit Plan for 2024 (the "Spanish Tax Audit Plan 2024").

We highlight below the main actions - some new and others reiterative - that the Spanish Tax Audit Plan 2024 foresees for this year, especially in the area of international taxation.

As a novelty, the Spanish Tax Agency is expected to focus its attention on the following actions:

• Ensure compliance with the rules implemented by the Multilateral Agreement (MLI), which progressively implements all those measures derived from BEPS project that require the modification of tax treaties.
• Control of the use of legal entities for the purpose of accessing input VAT deductions when they are related to entities that do not have this right, with the sole or main purpose of reducing taxation.
• Control of the setting up of offshore profit retention structures.
• Reinforcement of control over "neobanks" (companies which are validly registered before the authorities of any Member State of the European Union but which, by virtue of the rights of freedom of establishment and freedom to provide services, may carry out digital financial services in Spain, without having any physical presence in Spain).
• In general, reinforcement of control in the area of the digital economy, and in particular, as has been done in previous years, of the control of foreign operators that sell their products in Spain through their e-commerce platforms.

As in previous years, the Spanish Tax Agency is expected to continue carrying out the following actions:

• Control over Spanish REITs and, in particular, over the compliance of the investment requirements and the distribution of dividends to their shareholders.
• Control over e-commerce platforms.
• Control over land-rich entities owned by non-residents.
• Control and regularisation of the Autonomous Community tax residency shopping.
• Control of the tax residence of those persons who, despite residing in Spain, pretend to have their tax residence abroad in order to reduce their taxation in Spain.
• Expediting the exchange of available information (from both national and international sources) to reinforce the control actions, both in the preliminary selection phase of candidates to be audited and in the development phase.
• Increase in the number of Joint Audits (which are tax audits made simultaneously with Tax Administrations from other jurisdictions).
• Control over transactions carried out with virtual currencies.
• Control over the effective implementation of anti-abuse rules such as those addressed to limit the deductibility of financial expenses, anti-hybrid rules and those addressed to avoid the abuse of tax treaties.
• Control over Corporate Income Tax ("CIT") and VAT groups, specially focused on the composition of said groups.
• Tax audits to check whether the non-resident recipients of Spanish-sourced dividends, interest or royalties qualify as beneficial owners, with the aim of preventing an abusive use of EU legislation benefits.
• Checks to taxpayers who have pending carry-forward tax losses and other CIT credits.
• Control over the transfer pricing strategies used by multinational groups.
• In-person visits by tax inspectors to the places where economic activity is carried out.

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