Minutes of the meeting

Large Companies Forum

MINUTES OF THE PLENARY SESSION 1/2020

President of the Forum of Large Companies

President of the State Agency for Tax Administration - Secretary of State for Finance

Mrs. Ines Maria Bardon Rafael

Vice-President of the Large Companies Forum

Director General of the State Agency for Tax Administration

Mr. Jesus Gascon Catalan

Members representing the Tax Agency

Director of the Revenue Department

Mr. Guillermo Barros Gallego

Director of the Department of Aduanas and Excise Duties

Ms. Mª Pilar Jurado Borrego

Central Delegate of Large Taxpayers

Mr. Manuel Trillo Alvarez

Deputy Director General of Tax Technology - Tax Management Department

Mrs. Mercedes Jordán Valdizán

Deputy Director General of Legal Management and Legal Assistance - Department of Financial and Tax Inspection

Mr. Marcos Alvarez Suso

Members representing Large Companies

ACERINOX

General secretary

Mr. Luis Gimeno Valledor

ACS

Director of Tax Advisory

Mr. Alfonso Moreno Garcia

AMADEUS IT GROUP SA

Tax Manager - Corporate Legal & Tax Department

Mrs. Elena Alvarez Sotorrena

BANCO SANTANDER

Group Executive Vice President

Mrs. Carmen Alonso Peña

BANKIA

Director of Tax Advice - Tax Advisory Department

Mr. Juan José Lagares Gómez-Abascal

BBVA

Director of the Tax Department

Mr. Jose Maria Vallejo Chamorro

LA CAIXA

Director of Tax Advisory

Mr. Manel Alfonso García Rodríguez,

CEPSA

Fiscal Director

Mr. Alberto Martin Moreno

COFARES

Advisory Board of Directors

Mr. Luis Valdeolmos Gonzalez

EL CORTE INGLÉS

Director of the Tax Department

Mr. Luis Maria Sanchez Gonzalez

ENDESA

Head of Tax Affairs

Mrs. Maria Muñoz Viejo

FCC

Director of the Tax Department

Mr. Daniel Gómez-Olano González

GENERALI

Director of Accounting Area

Mr. Martí Jo Ruiz

IBERDROLA

Global Director of Tax

Mrs. Begoña Garcia-Rozado Gonzalez

IBERIA

Spanish Tax Lead

Mrs. Cristina Santana Negrin

INDITEX

Director of Tax Advisory

Mr. Andres Sanchez Iglesias

MAPFRE

Tax Advice Director

Mr. Antonio Lafuente Gonzalez de Suso

MERCADONA

Fiscal Director

Mr. Rafael Hilario Lopez Villanueva

MICHELIN

Fiscal Manager

Mrs. Rosa María Peña García

RENAULT

Director of Tax and Customs Affairs

Mr. Felix Ruiz Madarro

REPSOL

Director General of Economic and Fiscal Affairs

Luis Lopez-Tello and Diaz Aguado

SEAT

Director of Taxes

Mrs. Francisco Javier Baulenas Setó

SIEMENS

Director of Taxes

Mrs. Ana Maria Moreda Galante

TELEFÓNICA

Fiscal Director

Mr. Angel Martin Gomez

VODAFONE

Tax Advice Director

Mr. Javier Viloria Gutierrez

Technical Secretariat of the Large Companies Forum

Technical secretary

Mrs. Rosa Maria Prieto del Rey

On June 30, 2020, the twentieth plenary session of the Large Companies Forum will be held by videoconference, with the attendance of the people mentioned above, and in accordance with the following:

AGENDA

1. Opening of the session.
2. Approval of the minutes of the meeting held on November 19, 2019.
3. Results of the different working groups of the Forum.
4. Next call.
5. Other considerations, requests and questions.

1. Session opening

The session was opened by Ms. Inés María Bardón Rafael, President of the State Tax Administration Agency and Secretary of State for Finance, in her capacity as President of the Large Business Forum, who, after greeting the attendees, thanked them for their presence taking into account the exceptional situation that is being experienced worldwide due to the health crisis. He adds that the fact that these meetings are being resumed, even if they are by videoconference, demonstrates everyone's desire to return to relative normality and to focus efforts on continuing with the respective roadmaps, adapting them to the special circumstances that have taken place.

He then gives the floor to Mr. Jesús Gascón Catalán, Director General of the State Tax Administration Agency and Vice President of the Large Business Forum, to comment on the agenda.

Mr. Jesús Gascón points out that the meeting will present the work of the different groups of the Forum, which, despite the difficulties, have met and continued with their tasks during the first half of the year.

Mr. Jesús Gascón then gave way to the second point on the agenda.

2. Approval of the minutes of the meeting held on November 19, 2019

Mr. Jesús Gascón gives the floor to Ms. Rosa María Prieto, Director of the Planning and Institutional Relations Service, who points out that the minutes of the 19th session of the Plenary Session of the Forum were sent to its members and adds that, since no observations have been received and if there were none at this time, it would be definitively approved. As no observations were made by those present, the minutes of the plenary session of November 19, 2019 are declared definitively approved.

3. Results of the different working groups of the Forum

At this point on the agenda, the Director General of the State Tax Administration Agency indicates that the working groups have had very intense activity due not only to the regulatory changes that have been produced in tax matters due to the situation. health emergency caused by COVID-19, but also due to the implementation by the Tax Agency of a series of initiatives on which it had been working, such as the transfer to taxpayers of tax data for the next campaign of the Corporate Tax that starts tomorrow or the new assistance service in completing the self-assessment of VAT for taxpayers in the SII . Thus, the working groups for the “Analysis of indirect tax burdens” and “Analysis of tax regulations and conflict reduction” have held two joint virtual meetings during this semester, and the “Cooperative Relations” and “Special Taxes” working groups have each held their respective meetings.

She then gives the floor to Ms. Mercedes Jordán Valdizán, Deputy Director General of Tax Technology of the Tax Management Department, who will present the issues concerning the working group for the Analysis and Rationalization of Indirect Tax Burdens.

Ms. Mercedes Jordán begins her presentation by pointing out that the following issues were discussed at the meetings of the working group, among others:

• News in the Corporate Tax campaign: The working group was informed that, as of July 1, the tax data held by the Administration would be available to taxpayers and that, although the display of the same would be very similar to that of Renta WEB, in this campaign they would not be able to be automatically transferred to Sociedades WEB. It was also noted that the information would refer to the calendar year 2019 and would include data declared by third parties and by the entity itself, not only in model 200 of previous years, but also in others, such as, for example, 190; Census information and information derived from sanctions and surcharges would also be included. As a limitation, it was indicated that, since the data were going to be related to the calendar year 2019, they would not be adjusted to the tax period of those entities that had it split.

  The Deputy Director General of Tax Techniques emphasizes that, in this way, assistance services in Corporate Tax are promoted in order to advance in the same line that has been followed with Personal Income Tax and the VAT .

  On the other hand, Ms. Mercedes Jordán points out that, although there have not been major regulatory changes in the tax, the models have had some significant modifications, such as, for example:

  • Improved taxpayer identification and declaration characterization with the inclusion of new boxes on page 1: Firstly, a special mark has been created to identify entities that apply the reduced rate for the ZEC zone (Canary Islands Special Zone) and, at the same time, are part of a tax group that applies the tax consolidation regime; A box has also been included to identify religious entities that comprise other smaller entities dependent on them; And finally, a box has been included to identify those entities that have a multinational character.

  • Changes to accounting result adjustments: A greater breakdown has been introduced into the corrections to the profit and loss account result. This breakdown is based on improving control and assistance, since the objective is to be able to inform the taxpayer of the pending adjustments in the years following the year in which they are declared. On the other hand, finally, the breakdown in the 2019 campaign will be voluntary, due both to the delay in the publication of the ministerial order, and to the exceptional circumstances of this year; However, in the following exercises it will be mandatory.

  • Although the deadline for filing the tax established in article 124.1 of the Corporate Tax Law is maintained, Royal Decree-Law 19/2020 has modified Royal Decree-Law 8/2020, so that those entities that, at the end of the filing period, have not approved their annual accounts, can file the declaration with the available accounts. To do so, they would have to record this circumstance by checking the corresponding box on page 1 of the form, and if subsequently, as a result of the approval of the annual accounts, the self-assessment of the tax differs from that already submitted, they would have until November 30 to submit a new declaration. This deferral may consist of any of the accounting data declared, regardless of whether it affects the result. In this case, a second declaration must be submitted, which may be complementary or non-complementary, indicating your qualification when submitting the declaration. This will allow the previous situation to be regularised with the consequences provided for in Article 12 of Royal Decree-Law 19/2020 regarding late payment interest in one case or another.

• News in VAT : In the working group it was reported that, since February, a pilot project called “Pre303” was available on the Tax Agency's website, consisting of a new help service for 17,000 taxpayers included in SII , specifically, those that are registered in the REDEME , that are not large companies or groups of VAT and comply the following requirements:

  • that are not included in the cash regime nor are they recipients of the same;

  • that are not included in the special regime of used goods, works of art, antiques and collectibles, nor Travel Agencies, nor Investment Gold

  • that do not have prorata or differentiated sectors.

  It was also noted at the working group meeting that this project was structured in two phases: The first one, available from July, would allow you to consult the details of the invoices included in the added registration books; and a second phase, available from January 2021, consisting of the expansion of the group that will be able to use the “Pre303” help service. The plan is to include large companies with certain characteristics and to provide assistance in filling in additional data. As an example, Ms. Mercedes Jordán cites the case of those taxpayers who have taken advantage of the possibility of deferring the VAT on importation at Customs, and who have to enter it in the monthly self-assessment. Since the Tax Agency has this information, it would be an improvement in the assistance services to offer the corresponding box of the declaration completed. All information regarding the new features of this support service can be found in the FAQs on the Pre 303 banner. For these purposes, it is mentioned that these services have already been informed by sending information letters. Finally, please note that for the proper functioning of the help services, it has been necessary to implement technical improvements in the SII regarding the validation of the data included in the registration books and which will be applicable from January 1, 2021.

Mr. Jesús Gascón thanks Ms. Mercedes Jordán for her intervention and gives the floor to Mr. Marcos Álvarez Suso, Deputy Director General of Legal Management and Legal Assistance of the Department of Financial and Tax Inspection, so that he can comment on the activity during this semester of the working group on Analysis of Tax Regulations and Reduction of Conflicts.

Mr. Marcos Álvarez Suso indicates that this working group held two meetings during the first half of 2020, specifically on May 14 and June 16, and the following matters were discussed:

• Council Directive (EU) 2018/822 of 25 May 2018 (Directive on Fiscal Intermediaries or DAC 6): The General Directorate of Taxes reported that the bill was in the parliamentary process and that, following the opinion of the Council of State, some issues had been modified, such as:

  • Regarding professional secrecy: All intermediaries (not just lawyers) who provide neutral advice are recognised. Thus, second opinions or advice when a trial is imminent would be protected by secrecy.

  • The sanctions have been increased because the Council of State has considered that they were not sufficiently dissuasive.

  In relation to DAC 6, the Deputy Director General of Legal Regulation adds that on June 26, Directive 2020/876, of June 24, was published in the Official Journal of the EU of 2020, which includes the need, due to the COVID-19 pandemic, to defer certain deadlines for the presentation and exchange of tax information. Thus, Member States that choose to apply it are empowered to extend the deadline for communication of cross-border mechanisms, so that,

  • those corresponding to the transitional period (those whose first phase of implementation had taken place between June 25, 2018 and June 30, 2020) be extended until February 28, 2021,

  • those corresponding to mechanisms whose first phase of execution takes place between July 1 and December 31, 2020, are extended by one month,

  • and those corresponding to marketable mechanisms, are extended until April 30, 2021.

• Status of tax application procedures during the state of alarm: It was explained at the meeting that, from March 14 to May 30, there had been a suspension of both the duration of the procedures for applying taxes already initiated, and the prescription and expiration periods of those procedures not initiated, also causing a suspension in the activity of the Departments of the Tax Agency, in general, except for those actions that were considered essential and with favorable effects for the taxpayer, such as, for example, the verification of refunds, in order to provide liquidity. However, when the taxpayer in a procedure already initiated chose to complete a pending procedure, the Tax Agency considered that the interested party wished to continue with the processing of the procedure, and this has been done. It was also noted at the meeting that late payment interest continued to accrue both in favour of and against the Administration. On the other hand, the Director of the Department of Financial and Tax Inspection commented that during the state of alarm the processing of procedures with relevance to taxpayers had been reduced by 90% and that, once it had ended, the processing of procedures was continuing with an increasing trend towards normality.

• Extensions of deadlines and due dates in the approved Royal Decree-Laws, as well as facilities for payment of tax debts: Representatives from the Tax Collection Department presented a very detailed analysis of the exceptional regulations issued during the state of alarm, as well as the measures adopted to articulate all the payment facilities established in Royal Decree-Law 7/2020.

• Regulatory measures proposed or adopted during the state of alarm: The Department of Financial and Tax Inspection pointed out that, since the work of the Tax Agency was limited to the management and application of the tax system and not to the establishment of tax policy, its action in relation to the proposals received during the period had focused on analysing their impact on the management of taxes, that is, studying how to implement these measures and their effect on whether compliance is facilitated or not, as well as their impact on the risks of non-compliance. It was also reported that the Spanish tax authorities were aware of the regulatory measures adopted by other countries, both within the European Union and worldwide. In this sense, it was commented that the Tax Agency was participating in the OECD meetings where the measures that were being adopted in other countries were being analyzed. Thus, during the working group meeting, it was pointed out that many of the requests made by the private sector consisted of the application in our country of certain initiatives implemented in other countries. In this matter, it was stressed that each country had its own characteristics, so the Spanish Administration, knowing the actions of other States, had to consider which ones to implement with its adaptations, focusing on the sectors especially affected by the pandemic.

  In relation to this point, the Deputy Director of Legal Management and Legal Assistance points out that, as regards the regulatory measures approved, the Departments of the Tax Agency have made a considerable effort to facilitate compliance with tax obligations for taxpayers. To this end, a specific section, “COVID-19 Tax Measures”, has been created on the website, where, among other information considered of interest, relevant information on the subject has been collected in “questions and answers” format. Mr. Marcos Álvarez adds that the last block that has been published has been dedicated to the deadline for declaring Corporate Income Tax.

• Supreme Court rulings of May 18 and 19 in relation to VAT on sales of shares: The Inspection Department noted that, in relation to companies holding of shareholdings, these judgments had clarified the rules for determining the apportionment, both in relation to the amounts derived from the sale of shares, and with respect to the amounts resulting from the sale of financial derivatives. Regarding the first case, the judgment concludes that the sale of shares is not an accessory activity and, therefore, is included in the denominator of the apportionment; Regarding the second case, it declares that it is an activity not subject to VAT , so it is not included in the calculation of the prorata. In this regard, it was indicated that the Tax Agency was carefully studying the two rulings, since it had been a very controversial issue, and that, from now on, the opinion of the Supreme Court would be taken into account, having been forwarded to the territorial departments.

• Ruling of the Court of Justice of the European Union, of June 11, 2020, regarding the subjection to VAT of the amounts received by telecommunications companies as penalties to the customer for non-compliance of the stay period: At the meeting it was pointed out that what was notable about the ruling was that, regardless of the calculation method to determine the amount of the penalty, the Court understood that said amount formed part of the taxable base of VAT . For their part, the companies requested that this change in criteria be publicized, given that the administrative doctrine of the General Directorate of Taxes, prior to the ruling, established the non-inclusion of the amount of the penalty in the tax base of VAT . It was stated that the General Directorate of Taxes was working on issuing a consultation in this regard.

• Deductibility of directors' remuneration: Mr. Marcos Álvarez comments that this issue was discussed in the working group at the request of the companies, where it was pointed out that, regardless of the reform carried out in article 15 of Law 27/2014, on Corporate Tax, it was necessary to be aware of the existence of the judgment of the civil chamber of the Supreme Court, dated February 26, 2018, which had in turn been echoed by the Central Economic-Administrative Court in its resolution of October 8, 2019. For their part, both the General Directorate of Taxes and the Tax Agency stated that they were aware of the importance of the matter and that it required a clear and prompt solution. The Deputy Director General of Legal Management and Legal Assistance adds that, in these terms, the Central Delegation of Large Taxpayers has forwarded it to the TEAC in order for it to issue a new resolution to which to adapt the actions.

To conclude his intervention, Mr. Marcos Álvarez comments that his Department is preparing different notes that include the respective administrative criteria of general application on issues such as the deductibility of VAT borne by entities. holding, the application of the principle of full regularization in VAT and the taxation of non-resident artists and athletes. He points out that these are very complex issues in which legislation, jurisprudence and administrative doctrine must be brought into line, so the final approval of the criteria falls to the General Directorate of the Tax Agency. Finally, he added that as soon as they are finalised, they will be communicated to the members of this Forum.

Mr. Jesús Gascón thanks Mr. Marcos Álvarez Suso for his intervention and offers the floor to those present, in case they wish to make any observations.

Ms. Begoña García-Rozado González, representative of Iberdrola, took the floor and, in relation to the deductibility of directors' remuneration, asked whether this issue was being raised only for senior management contracts or also for directors' remuneration in general, regardless of whether or not a particular type of contract existed.

Mr. Marcos Álvarez answers that the issue that the TEAC is expected to clarify is that of the deductibility of the remuneration of directors in general, and, specifically, whether the three successive requirements established by the Supreme Court ruling to determine the matter must be respected in their strict terms (remuneration system included in the statutes, agreement of the general meeting and agreement of the board of directors itself distributing the remuneration among the different members).

Since there are no further interventions, the Director General of the Tax Agency gives the floor to Ms. María Pilar Jurado Borrego, Director of the Customs Department and II. EE. , in order for her to comment on the activity of the Special Taxes working group.

Ms. Pilar Jurado begins her presentation by pointing out that the Special Taxes working group met on June 3 and addressed the following issues:

• Electricity Tax: The representative of the Customs and Excise Department reported on the main changes planned in the draft order approving the self-assessment model for the tax:

  • Regarding the census: The literals of the Electricity Identification Codes (CIE) are modified, adapting them to the regulations governing the Special Tax on Electricity and the Electricity Sector. Likewise, different CIE are approved in order to individually identify the reduction applied. In addition, the application for registration can be submitted electronically at the Tax Agency's electronic headquarters.

  • Regarding the self-assessment model: A greater breakdown of the data provided is required, thus contributing to the clarification of the information, both for the Administration and for the taxpayer, by being able to have greater detail. It can also be submitted electronically at the Tax Agency's electronic headquarters.

• Census of final consumers of subsidized diesel: The ministerial order announced the upcoming development of the provisions of article 106.4 of the Special Tax Regulations (RIE), so that those who register in the Tax Agency's Registry of Final Consumers can prove their status as final consumers by registering in said census. It was also noted that the ministerial order would include, in addition to the creation of the census, the subjective scope (final consumers with mandatory/voluntary registration), the requirements and procedure for registration in the census, as well as for the modification of the data communicated on the occasion of registration and the enabling of a consultation system. At this point, Ms. Pilar Jurado adds that, in her opinion, the issue of greatest interest to those present at this Forum is the establishment of a census consultation mechanism for distributors, which will allow them to have greater certainty about the status of final consumer of their client, since this is stated in the census of the Tax Agency.

• Immediate Supply of Special Manufacturing Tax Accounting Books (SILICIE): The Director of the Customs and Excise Department comments that the obligation to electronically supply accounting entries by establishments affected by the Excise Tax regulations is enforceable with effect from January 1, 2020, although the possibility of supplying data corresponding to the first half of 2020 during the period between July 1 and September 30 had been established. He adds that due to the situation caused by the health crisis, different sectors requested an extension of the deadlines from the Tax Agency since were having problems with the software development companies. Thus, Order HAC/566/2020 was published this June, allowing accounting entries for the year 2020 to be submitted until January 15, 2021.

• Special Tax on certain means of Transport: companies mentioned at the working group meeting the problems that had arisen with the presentation of form 576 in April, which had prevented the registration of a large number of vehicles. The Customs Department and II. EE. reported that it had already been resolved and that, indeed, errors had been detected in the electronic registration codes (CEM) which resulted in a blockage in registration due to a system filter that was operating incorrectly. After releasing it, the problem persisted due to an error in the Traffic system, which did not capture the data from the Tax Agency.

• Status of the Energy Taxation Directive: The Customs and Excise Department commented that the current legislation was from 2003 and that there had been some drafts since then, but that they had not been able to be developed mainly because the positions of the Member States had been very opposed. He added that environmental protection was currently gaining importance and that “green taxation” was being promoted as an essential part of Climate and Energy Policy, especially since the approval by the European Commission of the “Green Package”. Likewise, it is. reported that the European Commission had published its assessment of the Energy and Electricity Taxation Directive in September 2019. He added as a summary that, based on the changes that have occurred in the matter since 2003, such as the modifications in the percentages of use of renewable energy (from 6 to 18%) or in those of renewable electricity (from 13 to 31%) or international agreements such as the Paris one and the political objectives for the future (a single efficient and self-sufficient energy market and a demanding emissions reduction program), it could be concluded that there is a lack of harmonization between the Member States at the level of taxation, but that implementation at EU level offers advantages over doing it at national level.

Mr. Jesús Gascón then thanks Ms. Pilar Jurado for her intervention and gives the floor to Mr. Manuel Trillo Álvarez, Central Delegate of Large Taxpayers, so that he can comment on the activity of the Cooperative Relations working group.

The Central Delegate reports that the Cooperative Relations working group met on June 23 and that, among others, the following issues were addressed:

• The first point developed had been raised by the companies and referred to the establishment of an action plan on cooperative relations for the coming years, through the analysis of a series of issues of a varied nature, such as bringing controls closer to the current year, publicizing certain risk analyses, reviewing the sanctions policy, giving greater value to transparency reports, etc., as well as delving deeper into the modification of the culture of cooperative compliance within the Administration, just as was being done in the business sector. The Tax Agency proposed that companies compile in a document the issues they considered to be priorities, in order to be able to analyse and debate them. In addition, with regard to the actions proposed by companies that demanded regulatory changes, it was noted that the current situation was not considered very conducive to this type of initiative. On the other hand, in relation to the proposal for a change in the culture of the Tax Agency, it was highlighted that the cooperative relationship had been a matter of great interest to the Administration for several years and that a good example was the "Strategic Plan of the Tax Agency 2020-2023", where a series of objectives were established, considered priorities, as well as the lines of action to achieve them, which represented a determined commitment to improve and enhance the cooperative relationship, information, assistance, prevention, the promotion of voluntary compliance, the reduction of conflicts, the reduction of interest payments as a result of greater speed in procedures, etc. In other words, it was pointed out that the Tax Agency's actions went beyond obtaining the income necessary to cover public spending and that, although there were limitations, the paradigm shift was evident.

  On the other hand, in relation to transparency reports, all participants in the working group meeting agreed to consider them an essential instrument of the cooperative relationship and, probably, the most tangible, although companies demanded, as on previous occasions, that they be made more useful, especially in terms of the feedback from the analysis carried out by the Administration. Representatives of the Tax Agency stated that the conclusions derived from the study of the transparency reports were producing internal changes in decision-making, especially in the area of control, but that they could not be made public. It was added that the Tax Agency was aware of the importance that this feedback had for companies, but that at present there was no legal mechanism to implement it. It was also noted that each year, during the course of analysing transparency reports, doubts arose regarding the application of tax regulations and that the Administration was making an effort to resolve them with reasonable speed. It was also noted that the implementation of transparency reports had contributed decisively to strengthening mutual trust. However, companies insisted on the need to go further in assessing transparency reports, highlighting that they constituted an unprecedented practice in other countries in our environment and that they demonstrated the spirit of collaboration of the entities and their commitment to advancing the model. The Tax Agency pointed out that the depth with which any operation was analysed in a control procedure was not the same as that devoted to the analysis of transparency reports. It was added that, although both procedures were closely linked, the transparency reports provided very important information about the company and its operations, but that they were never equivalent to that obtained in an inspection procedure.

  To conclude this point, the Central Delegate comments that, in this area, both the Administration and the companies still have room for progress and reiterates the proposal made at the working group meeting to the companies to present a document with the issues they consider to be priorities in order to promote the cooperative relationship model.

• The second item on the agenda addressed various issues relating to the impact that the COVID-19 crisis could have on international taxation. Thus, the Head of the National Office of International Taxation reported that the OECD had launched two lines of work in relation to the regulatory initiatives that the different states had adopted on the occasion of the health crisis. Regarding the first, he noted that the Secretariat of the organization had published a note on the impact of the pandemic on the rules contained in double taxation agreements on tax residence, cross-border workers, etc. In relation to the second line of work, dedicated to the study of the impact of the pandemic on the transfer pricing policies of multinational groups, he indicated that the OECD was collecting information through a questionnaire, from both tax administrations and companies, on the issues or problems that were already being raised or that were thought to be likely to arise in the near future. Likewise, the representative of the Tax Agency offered to serve as a liaison with the OECD transfer pricing working group.

  On the other hand, there was also information on the digitalization project that, under the impulse of the G-20 and the direction of the OECD , tried to find a global consensus solution to the challenges of the digitalization of the economy. It was noted that the project revolved around two pillars: Pillar 1, which aims at the reallocation of taxation rights between states and is developed with the so-called "unified approach", and Pillar 2, which aims to resolve issues that allow progress beyond the agreements BEPS , so that all profits of multinational groups have minimal taxation. The Tax Agency reported that, although the work had continued to progress at a good pace, the following circumstances had recently occurred that would affect its development: Firstly, although the work was initially expected to be completed at the end of 2020, it was recently reported that the meeting of Finance Ministers scheduled for July, at which the political commitment to the key lines of action was to be adopted, had been postponed to October; Secondly, it was reported that the US Secretary of the Treasury had sent a communication to all countries where there was a legislative initiative or that had already implemented a tax on the taxation of digital services, stating that he did not consider the timing to be opportune since there were other priorities and warning of possible reactions. For their part, the Administrations of Great Britain, Spain, Italy and France, in a joint response, replied to the American Administration by appealing to dialogue and stressing that there was still time to reach a consensus. Finally, the representative of the Tax Agency pointed out that the G-5 (except the United Kingdom) had proposed a minimum tax system with intermediate positions, so that it could be agreed upon by a large number of countries and that this initiative had indeed had the support of the United States.

• The third point on the agenda addressed the amendment of article 151 of the General Tax Law (VIVI Project) by Royal Decree-Law 22/2020, of June 16: The Central Delegate indicates that the Deputy Director General of Legal Organization and Legal Assistance will be responsible for making his presentation.

• Finally, the Central Delegate points out that also in this working group, in the section on “Questions and requests”, the issue of the deductibility of the remuneration of the directors was discussed, but as Mr. Marcos Álvarez has already developed it extensively, he only wants to emphasize that the Tax Agency has adopted a prudent decision in this matter, which is to wait for the TEAC to pronounce itself, since it will do so shortly. He added that he strongly hopes that there will finally be a criterion and that, although this will inevitably please some more than others, it will allow us to definitively overcome the constant discussions on the subject.

Next, Mr. Jesús Gascón thanks Mr. Manuel Trillo for his intervention and gives the floor to Mr. Marcos Álvarez.

The Deputy Director General for Legal Management and Legal Assistance first comments that the Director of Financial and Tax Inspection has asked him to apologise on his behalf for not attending this plenary session, but that professional reasons have prevented him from doing so.

Mr Marcos Álvarez then points out that, in relation to what was discussed at the meeting on the cooperative relationship model, he only wants to add that it is necessary to also take into account the impact that any initiative in this area may have on smaller entities.

Next, in relation to the regulatory modification that already legally enables the development of actions and procedures through digital systems, Mr. Marcos Álvarez highlights that this is a voluntary system for both parties and that it will mean considerable savings in management and travel costs, that is, it will require a bilateral agreement and that it will be implemented as it is considered necessary, provided that the taxpayer has the means that allow him to interact remotely and telematically with the actuary, in order to avoid unnecessary travel. On the other hand, it indicates that one of the challenges facing the system is to guarantee a secure and valid exchange of documents that can be incorporated into an electronic file with all the guarantees, both of representation, as well as authenticity, confidentiality, etc. In this regard, Mr Marcos Álvarez reports that the exchange of proceedings within the framework of inspection procedures is already operational in practice. He adds that he is not ready yet to sign the minutes, since this action requires additional qualified representation due to the waiver of rights that this may entail. Finally, he points out that this system is also applicable to taxpayer assistance services and that it will constitute a very useful working tool in ADIS (Comprehensive Digital Administrations).

Next, Mr. Jesús Gascón thanks Mr. Marcos Álvarez for his intervention and offers the floor to those present, in case they wish to make any comments. Since no interventions were made, the next point on the agenda was moved on.

4. Next call

Regarding the next meeting, Ms. Rosa María Prieto states that the intention is to maintain the semi-annual frequency of the meetings, indicating in this regard that the next meeting would be held, foreseeably, in the month of November. He added that, as far as the format is concerned, it is still a bit premature to announce it, as it depends on how the health crisis evolves, but that sufficient notice will be given.

The Director General then took the floor to comment that the working groups would also continue their activities during the second half of the year.

5. Other considerations, requests and questions

Mr. Jesús Gascón then moved on to point 5 on the agenda, “Other considerations, requests and questions” and, before giving the floor to those present, reiterated that the Strategic Plan of the Tax Agency 2020-2023 remains fully in force, although, as a consequence of the health crisis caused by COVID-19, as in the rest of the organizations, certain modifications are being made, especially for the year 2020. Next, he opens a round of talks.

Firstly, Mr. Ángel Martín, representative of Telefónica, intervenes, who states that he wants to thank the publication of the two consultations on the scrip dividends , as well as highlighting that the collaboration between the General Directorate of Taxes and the Tax Agency in resolving this matter has been very effective.

Next, Mr. Francisco Javier Baulenas, representative of Seat, took the floor and expressed his gratitude that, after having requested the completion of an inspection procedure that had already been initiated in order to stop generating interest, the Tax Agency immediately put in place all the mechanisms so that it could be completed quickly. He added that he would like to extend his thanks to the DCGC and the Barcelona inspection team.

Then, since there were no further interventions, Mr. Jesús Gascón excused the Secretary of State who had technical problems during the meeting and took the floor.

The Director General of the Tax Agency comments that, regarding the issue of cooperative relations, it is very important to maintain the degree of mutual trust achieved. He adds that, if at times there may be the impression of a lack of progress in the matter, one must take into account what Mr. Marcos Álvarez has commented in relation to the fact that any regulatory initiative must take into account the existence of SMEs . Mr Jesús Gascón emphasises that measures aimed specifically at large companies could only be adopted in cases where this is fully justified and there is political consensus.

Finally, the Director General of the Tax Agency thanked all those present for their presence and closed the twentieth plenary session of the Large Business Forum, saying goodbye until the next meeting.