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February 14, 2022

Spainís Tax Audit Plan for 2022 reveals intensified focus on conduit entities and beneficial ownership along with an increased use of technology

Executive summary

The Tax Audit Plan (the Audit Plan) is a document prepared annually by the Spanish Tax Authorities (STA) which sets forth the most relevant courses of action for the prevention and control of tax fraud.

On 31 January 2022, the STA published the general guidelines for the 2022 Audit Plan. These guidelines are publicly disclosed each year and may be of interest for international groups with a presence in Spain.

While many points are recurrent, some focus areas will receive singular attention or are designated as priorities, particularly in the context of international taxation.

This Alert summarizes the key focus areas for 2022.

Detailed discussion

Enforce beneficial ownership requirements and target the use of conduit entities

Payments of dividends, interest and royalties to non-Spanish residents without a permanent establishment in Spain are designated in the Audit Plan as an "area of preferential attention, particularly in the case of large enterprises."

The STA will review that the nonresident recipients of these payments qualify as the beneficial owners of the income and will reinforce the control of entities with low levels of economic activity whose main purpose is to unduly take advantage of tax benefits.

This increased focus on targeting the improper use of withholding tax exemptions continues the trend of recent years, where the STA have been very active in the scrutiny of international structures (See EY Global Tax Alerts, Spanish Tax Authorities deny withholding tax exemption on interest payments to EU residents based on GAAR, dated 6 January 2022 and Spanish central tax court applies doctrine of ECJ Danish cases to deny withholding tax exemption on dividend payments to EU shareholders, dated 26 June 2020). Again, the STA stress the importance of beneficial ownership, even though this requirement is not expressly set forth in some of the domestic exemptions. Nowadays this is the source of relevant current litigation.

This growing attention is also aligned with the propositions recently brought forward by the European Commission in the form of a legislative proposal for a Directive setting forth rules to prevent the misuse of shell entities for tax purposes, commonly known as UNSHELL or ATAD III (See EY Global Tax Alert, European Commission publishes draft Directive for preventing the misuse of shell entities (UNSHELL), dated 22 December 2021).

Widespread use of information technology and new data sources

The use of information technology has been growing notably during recent years and the STA are already at the forefront of using "big data" or "artificial intelligence" for tax purposes.

The Audit Plan, in line with the STA's triennial strategic plan, aims to further propel the use of information technologies to process tax data, which becomes more relevant as new sources of massive tax data become available to the STA, specifically:

  • Country-by-Country reports, in accordance with BEPS Action 13
  • Automatic exchanges of information on unilateral agreements under BEPS Action 5
  • Cross-border tax arrangements exchanged in the context of DAC6, the European Union Directive which established the Mandatory Disclosure Regime
  • Standard international exchange of information in the context of FATCA or the Common Reporting Standard (CRS)

Under this strategy, there is a new automatic system of tax risk analyses, which provides indicators, indexes and models for identifying patterns of conduct with high tax risk.

Other key focus points

As in past occasions, entities with recurrent losses, limitations to the deductibility of financial expenses, hybrid mismatches, tax havens and preferential regimes, undisclosed permanent establishment or improper profit attributions, control of corporate income tax and value-added tax groups, among others, will remain in the spotlight.


The Audit Plan reflects yet another sign of the prominence of the scrutiny to international structures by the STA and highlights the importance that multinational groups review their positions to assess any potential risks.

International structures shall be reviewed, and groups should adopt a consistent "audit-ready" approach to ensure that they are able to adequately support the appropriate level of business and material resources in intermediate entities, the qualification of these entities as beneficial owners of the relevant Spanish-sourced income and the business purposes for the structure. Preparation of contemporaneous support documentation and defense files may be helpful in this regard.

Multinational groups should also consider the use of tax technology and digital tools as a way to level the playing field, understand their position and ensure the consistency of the information that will be available to the STA, who are increasingly making use of such tools to assist in the audit procedures.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Abogados, Madrid

Ernst & Young LLP (United States), Spanish Tax Desk, New York