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  • Dispute resolution in M&A: arbitration, ordinary jurisdiction and mediation

    Mergers and acquisitions are highly complex transactions that in the worst case can lead to disputes between the parties. There are many possibilities for discrepancies to arise: the determination of the price, the breach of representations and warranties, the coverage of risks by insurance…

    Business disputes can be resolved either in the ordinary courts, in arbitration proceedings or through mediation. In this article we will review the pros and cons of each of these possibilities.

    Advantages of the arbitration procedure 

    The arbitration procedure is particularly advisable in these situations:

    • In international transactions. Because arbitration can provide a neutral forum for the parties, it overcomes potential disputes over jurisdiction and facilitates enforcement of the award in different countries.
    • When the parties wish to maintain confidentiality. Because the arbitration procedure allows for confidentiality to be agreed. In this way it is possible to avoid publicising the terms of the contract or the very existence of the dispute. In ordinary jurisdiction, on the other hand, awards are always public.
    • In transactions of particular technical complexity. If the object of the transaction is a company in a particularly complex sector, such as pharmaceuticals or banking, arbitration allows specialists to resolve the dispute.

    Ordinary jurisdiction in the resolution of disputes over the sale and purchase of companies

    In M&A litigation, going to the ordinary courts has two clear advantages:

    • It is less costly in terms of time and money. The main disadvantage of arbitration is its high costs. For this reason, in relatively small transactions and where the contingencies are not expected to be high, it is more advisable to resort to ordinary jurisdiction.
    • It allows for a second instance appeal. In ordinary courts, it is possible to lodge an appeal to a second instance. On the other hand, this possibility is very rare in arbitration, although it is provided for in some arbitration rules. In any case, it should be borne in mind that first instance awards usually have to be provisionally enforced. This means that, irrespective of whether an appeal can be lodged against it, the affected party must make the relevant disbursements at the time the award is rendered. Later, if the first instance judgment is overturned at second instance, the party who received the money will have to pay it back. But this does not eliminate the risk incurred by the party who had to make the payment in the first instance.

    Mediation: a solution beyond litigation

    The third way to resolve disputes arising from M&A transactions is the mediation process, which stands out for its efficiency and agility. These are its strengths:

    • It is the least costly option both in terms of time and money.
    • Maintains confidentiality.
    • The result is an agreement that is binding on the parties and enforceable in court.

    To all these advantages we may soon have to add one more. Because the Draft Law on Procedural Efficiency Measures for the Public Service of Justice envisages making it compulsory to resort to an appropriate means of conflict resolution before resorting to judicial proceedings in civil and commercial matters. If the rule is finally approved in these terms, going to mediation will serve as a prerequisite before being able to file the corresponding legal action.

    The most important thing in an M&A operation is not to have to resort to any of these dispute resolution channels between the parties. To avoid this, and to have the best legal advice in the event of going to a process of ordinary jurisdiction, arbitration or mediation, it is best to have a team of experts in mergers and acquisitions such as the one at Confianz.

  • Companies will have to file their sustainability information with the Commercial Register

    The European Union has set itself the objective of giving more and more weight to the sustainability of companies. And here the Business Register has a key role to play. As well as monitoring annual accounts, the recent Corporate Sustainability Reporting Directive (CSRD) stipulates that information on the sustainability of companies must be included in their management report in order to facilitate its scrutiny.

    The CSRD sets out stricter requirements for sustainability reporting by companies. In this way it aims to promote greater transparency of information related to the environmental, social and governance (ESG) performance of companies. This will help investors and other stakeholders to compare data and enable them to make more informed decisions.

    Timetable of the CSRD Directive

    The CSRD entered into force on 5 January 2023 and the first declarations are expected to be published in 2024, following these milestones:

    • 1 January 2024 for companies with more than 500 employees subject to the current non-financial reporting directive NFRD.
    • 1 January 2025 for large companies not currently subject to the NFRD Directive with more than 250 employees and/or EUR 40 million turnover and/or EUR 20 million total assets.
    • 1 January 2026 for small and non-complex credit institutions, captive insurers. The CSRD will also enter into force on 1 January 2026 for listed SMEs. But they will have an «opt-out» option available until 2028.

    Who is affected by the CSRD?

    The CSRD applies to more than 49,000 companies in the EU:

    • Companies listed on regulated markets.
    • Large European companies and those subsidiaries of non-EU companies operating in their territory if they meet at least two of the following requirements: a turnover of more than 40 million, a balance sheet total of 20 million or more than 250 employees.
    • Insurance companies and credit institutions.

    On the contrary, they are exempted:

    • Subsidiaries if the parent company includes them in its report.
    • Listed micro enterprises and unlisted SMEs, which may nevertheless choose to comply with the provisions of the CSRD on a voluntary basis.

    Paradigm shift in sustaintability reporting

    The European Union aims to put sustainability information on an equal footing with financial information. With this objective in mind, the deposit of non-financial information of companies will be promoted, together with financial information in the commercial registers. Data referring, for example, to the carbon footprint of facilities, energy efficiency certificates, etc.

    In this way, the aim is to help encourage the channelling of funds, investment and financing towards activities that are considered sustainable. Because the Business Register provides public and transparent information that has been subject to the registrar’s impartial control of legality. It thus creates a space of legal certainty and confidence for contracting.

    Against greenwashing

    Incidentally, this avoids greenwashing fraud, a marketing tactic that consists of giving an image of sustainability and respect for the environment to products and services that do not always comply with these premises to the letter.

    In the coming years, companies will face increasing sustainability due diligence obligations. Any announcements or statements about their performance in this area will need to be rigorously demonstrated to be true and backed up by information filed with the Companies Registry. In these times of increasing demands in terms of due diligence, Confianz gives you the peace of mind of knowing that you are complying with the current law at all times.

  • New rules on changes to the merger regime

    The regulatory scenario surrounding M&A transactions has taken a significant turn with the introduction of Royal Decree-Law 5/2023, enacted on 29 June. This decree replaces the previous Structural Modifications Law, introducing a variety of legal provisions concerning transformations, mergers and global divestitures, among other aspects.

    Criticisms and Controversies in the New Regulation

    Legislative Methodology 

    Any regulatory change of this magnitude generates reactions. Despite the urgency expressed for the approval of this regulation, there is criticism of the legislative method used. Some experts suggest that excessive recourse has been made to the Royal Decree-Law. These changes, although necessary, require careful planning and consultation to avoid unwanted impacts.

    Ambiguities and Grey Areas

    An effective legal framework must be clear and straightforward. However, the new regulation has ambiguous grey areas. One of these is its transitional regime, creating uncertainty as to which legal framework applies to operations started, but not completed, prior to 29 July 2023.

    New and Significant Changes

    Tax and Social Security Obligations

    The tax and social security landscape is constantly evolving. In this context, one of the most discussed changes is the new obligation for companies to demonstrate that they are up to date with their commitments, which will undoubtedly influence the strategic decisions of organisations.

    Creditor and Shareholder Protection

    The balance between incentivising business activity and protecting different actors is crucial. New safeguards are introduced which, while seeking to protect creditors and partners, can affect the speed and efficiency of operations.

    Worker’s Participation

    In an effort to democratise the process, workers, creditors and shareholders are given the right to comment on proposed amendments. This underlines the importance of transparency and participation in corporate decisions.

    At Confianz we fully understand the implications of the new regulations and, from our experience, we want to be that firm compass for companies that venture into the transformation process. Our mission goes beyond mere consultancy: we seek to be that pillar of support, offering tools and essential knowledge to adapt successfully. Because in a world full of challenges, we are proud to say that with Confianz by your side, every step is taken with certainty and confidence.

  • How to declare mixed (private and business) use of company cars

    Company cars that are also used privately by staff often give rise to a lot of tax questions. How should the costs of a fleet of vehicles be treated for income tax and VAT purposes? Read on to find out all the details.

    What happens when a company car is used for both work and personal use

    Many companies purchase or lease vehicles to provide them to employees who need to travel frequently, such as sales staff or management staff. Questions about the tax treatment of this expenditure begin when employees also use the car on a personal basis outside working hours.

    Over the years, this duality in use has led to great disparity in the criteria expressed by the Administration and the courts. For this reason, the AEAT has recently published a note clarifying the criteria applicable to this type of remuneration.

    Tax treatment of company cars in 2023

    Employee’s personal income tax

    When a company car is used for both professional and personal purposes, it is considered as remuneration in kind and must be included in the employee’s payroll, paying personal income tax and social security contributions.

    The main difficulty here is how to determine the exact monetary value of this remuneration in kind. There are different possibilities here:

    • Delivery of the vehicle to the worker as his or her own property. The cost of acquiring the vehicle and the associated taxes are included as remuneration for work in kind. The only limit is that the remuneration in kind cannot exceed 30% of the annual salary.
    • The worker uses the vehicle but does not own it.
      • If the vehicle is owned by the company, the remuneration in kind is 20% per year of the acquisition cost of the vehicle, without taking into account depreciation.
      • If leasing, the payment in kind is 20% per year of the market value of the new vehicle.
    • Use of the vehicle by the employee with subsequent delivery. During the period of use, the remuneration in kind is 20% per year of the new market value. If the car is eventually delivered to the worker, the market price of the used car at the time of delivery is considered, taking into account the previous use.

    Reductions for the use of energy-efficient vehicles

    In the case of the best performing vehicles from an energy efficiency point of view, they have interesting reductions:

    • Vehicles with CO2 emissions of less than 120 g/km and market value (before tax) not exceeding 25,000 euros: 15%.
    • Hybrid vehicles with a market value (before tax) not exceeding 35,000 euros: 20%.
    • Battery electric vehicles (BEV), extended range electric vehicles (E-REV) or plug-in hybrid electric vehicles (PHEV) with a minimum range of 15 km and a market value (before tax) not exceeding 40,000 euros: 30%.

    Company VAT

    As far as VAT is concerned, as the vehicle is a mixed-use vehicle, the company will be able to deduct 50% of the input VAT. 

    If the business use of the vehicle exceeds 50%, it is possible to try to deduct a higher percentage, but the tax authorities impose considerable restrictions on this possibility. The hours foreseen in the collective agreement, weekends, public holidays, holidays and working hours outside working hours on working days will be taken into account.

    Tax planning for company fleet management

    With increasing scrutiny from the Inland Revenue, careful consideration needs to be given to tax planning around the use of company cars to avoid penalties and disputes. At Confianz we monitor changes in current regulations to offer our clients the best tax approach.

  • Rights and obligations of the insolvency creditor

    When a company in difficulty files for bankruptcy, any natural or legal person to whom the company owes debts is considered a creditor in bankruptcy.

    To remedy this situation, the reform of the Insolvency Act launched in September 2022 establishes new debt cancellation mechanisms that aim to provide greater protection to both insolvency creditors and debtors.

    With this objective in mind, the new Insolvency Law seeks an early solution and introduces mechanisms to resolve potential problems of default by companies as quickly and efficiently as possible. To this end, it gives the insolvency creditor the opportunity to participate in the negotiations to obtain its money. If both parties do not reach an agreed solution, the insolvency creditor must participate in the insolvency proceedings. In this respect, it should not be forgotten that in the insolvency proceedings it is also a priority to avoid, whenever possible, that the debtor loses all economic stability and is forced to liquidate his assets. If the debtor’s situation is insurmountable, insolvency law provides the necessary legal tools so that the debtor can make an orderly exit from the market by carrying out a liquidation with the least possible impact for all parties involved.

    Rights of an insolvency creditor

    The reform of the Insolvency Law grants more participation and prominence to the insolvency creditor, who has a series of legal protections. Their most important rights are:

    • Submit all relevant documentation proving that a debt does indeed exist. All parties adversely affected by the debtor’s insolvency must be accredited in accordance with the law in order to participate in the negotiations. Ideally, this should be done through evidence showing the origin, nature, amount, acquisition and maturity dates of the claim.
    • Apply for a declaration of insolvency of your debtor.
    • If several of your debtors are part of the same corporate group, the insolvency creditor can apply for a joint court declaration.
    • To be able to know the declaration of the commencement of the insolvency proceeding in a public manner in order to have the opportunity to participate in it. This pronouncement is called the order of declaration of insolvency and must be published in the Official State Gazette, in the Public Insolvency Register and in the Commercial Register. After this publication, creditors have a period of one month to file with the insolvency administration.
    • Send by e-mail to the insolvency administration any documents it considers relevant to support the classification of the insolvency proceedings as guilty.
    • Appearing in the qualification phase of the insolvency proceedings, even when the insolvency administrator issues the report on the insolvency proceedings, in order to defend this position.
    • Creditors who have made allegations and whose debt exceeds one million euros or represents at least 5% of the total liabilities of the insolvent company may file a qualification report.

    Obligations of creditors in bankruptcy

    In order to carry out the insolvency proceedings, the insolvency creditors must comply with the following obligations:

    • Respect what is established in the negotiations and do not demand other conditions.
    • Accept payment from third parties to settle the debt. However, you are not obliged to subrogate the debt.
    • Pay compensation to the debtor in the event of a change in the debtor’s address where payment is due.

    Whether your company is about to file for bankruptcy or you are acting as a creditor in bankruptcy, the team of professionals at Confianz can advise you and help you to overcome these difficulties in the best possible way.

  • New taxation for family business donations

    Donors of family businesses must pay income tax (IRPF) on a capital gain on an amount proportional to the weight that the assets not assigned to the business activity have in the company’s assets. This is established in the ruling of 29 May 2023 of the Central Economic Administrative Court (TEAC).

    In this way, the TEAC changes its criterion to agree with the Tax Agency. This is still a relevant criterion that has not yet been reiterated and does not constitute consolidated doctrine, because this issue has not yet been brought before the Supreme Court and therefore there is no established case law. However, at Confianz we believe that this could undoubtedly be a new opportunity for the transfer of family businesses during their lifetime.

    Parents who donate the family business with assets that are not used for business purposes must pay personal income tax on capital gains

    According to the recent TEAC ruling, in the case of donations from family businesses that include assets that are not used in the activity, the donor must pay personal income tax on a capital gain on an amount proportional to the weight that these assets have in the company’s assets.

    This criterion is based on the application of Article 33.3 c) of the Personal Income Tax Law, which requires, in its reference to Article 20.6 of the ISD Law, and this, in turn, to Article 4 Ocho of the IP Law, that the assets of the entity whose shares are donated must all be used for economic activity.

    Thus, the taxation of the related assets continues to be deferred. The donor will not have to pay tax on them if he has held them uninterruptedly for at least five years prior to the date of transfer. The member of the business family who receives the donation will be the one liable to tax if the sale takes place.

    Tax hit on family business donations

    In fact, the TEAC is now actually unifying the rules due to a loophole in the Personal Income Tax law by applying a rule – that of Wealth Tax (IP) – which is the one that configures the requirements of the family business, although it is not the one that gives rise to the exemption, which is referred to the Inheritance and Gift Tax (ISD).

    According to the Central Economic Administrative Court, the same proportions of Inheritance and Gift Tax (ISD) should be applied to Personal Income Tax (IRPF), according to the tax regulations. The TEAC justifies this decision by referring to various articles of the IRPF and ISD laws, which indicate that the assets must be linked to an economic activity.

    The difficulty of valuing non-business assets

    With this new approach of the TEAC, there have also been almost simultaneous testimonies from affected taxpayers arguing that in their case the method of valuation of non-business assets for personal income tax does not reflect reality. For its part, the TEAC has defended the use of statistics from the Commercial Register and the consideration of essential factors such as the size and activity of the company.

    An added difficulty for succession in family businesses

    At Confianz we know that the moment of succession is one of the most critical for family businesses. While we are waiting to see if the Supreme Court will rule on this issue, there is no doubt that this TEAC ruling introduces a new tax difficulty and complicates the transfer of family businesses to descendants during their lifetime, in this case through donation.

  • Sustainability is already an unavoidable factor in M&A

    It is no longer marginal. The introduction of sustainability criteria in M&A transactions has become a strategic issue for companies in all sectors worldwide. Companies have overwhelmingly come to the conclusion that adopting corporate sustainability commitments helps to bring the merger or acquisition process to a successful conclusion. And, in the long run, it contributes both to achieving their strategic objectives and to improving compliance with the United Nations Sustainable Development Goals (SDGs).

    In today’s challenging regulatory environment, companies with a Corporate Responsibility and Sustainability strategy have a competitive advantage and are less vulnerable to changes in social, environmental or governance regulations.

    A challenge for sellers and buyers/inverstors

    The integration of sustainability criteria when evaluating a transaction provides greater certainty in estimating the value. However, it is essential that the seller provides a comprehensive assessment and conveys it accurately to the buyer or investor. Fine words are not enough. It is necessary to use mechanisms such as public domain searches or the use of business intelligence tools, which help to verify the required information with certainty.

    The potential buyer now also faces a new challenge: to find a target that is not only attractive from a strategic and financial perspective, but also aligned with its own environmental, social and governance criteria.

    Sustainability issues are embedded troughout the M&A process

    Today, any M&A transaction involves an in-depth analysis of the asset that goes beyond the traditional legal, tax and financial issues. The influence of ESG (Environmental, Social and Governance) criteria is transversal throughout the entire process:

    • In the due diligence phase. Analyses should now also include compliance with inclusion, diversity and equity policies. It is also necessary to identify potential legal risks on social and governance issues. Including how the target can provide its stakeholders with continuous monitoring of these issues. In addition, the strengths and weaknesses of the company’s sustainability agenda should be analysed and identified.
    • In the structuring, negotiation and closing of the transaction. Corporate Responsibility and Sustainability metrics and objectives should be incorporated into the valuation process. Also consider the impact of environmental, social and governance factors on the market. And foresee the future evolution of regulatory conditions and the different regulatory scenarios that could occur. Because purchase or investment agreements should be adapted to mitigate the risks arising from the level of compliance with the ESG criteria of the target. For example with the inclusion of representation and warranty assurances, closing conditions and post-closing obligations. Aspects that must be maintained before and after completion of the M&A transaction are also increasingly included in contracts. For example, the so-called Harvey Weinstein clause, whereby the seller must indemnify the buyers or investors if any of the target’s management is exposed or involved in sexual harassment and abuse.

    An added difficulty

    In short, the generalised inclusion of sustainability criteria in M&A transactions is an added complexity factor throughout the negotiation process. The Confianz M&A advisory team is ready to accompany your company throughout this process.

  • Faster Directive aims to reduce tax obstacles to the free movement of capital

    The European Commission wants to make capital markets more competitive. To this end, it is promoting the so-called Faster Directive, which aims to reduce the number of tax obstacles to the free movement of capital. This proposed directive aims to make the procedures for levying and refunding withholding taxes on foreign-sourced dividends and interest faster and more secure.

    Objectives of the Faster Directive

    The proposal was published on 19 June under the title «New EU system to avoid double taxation and prevent tax abuse: a faster and more secure deduction of over-collected withholding taxes at source«. Its final objectives are fourfold:

    • Limit excess withholding taxes on dividends and interest.
    • Facilitate investments by avoiding any kind of double taxation. Even if this is only initial and can be recovered in the long run.
    • Create a new EU-wide digital tax residence certificate.

    Main measures incorporated in the proposal for a directive

    The proposal is eminently procedural and not material. And these are the basic actions it introduces:

    The digital certificate of tax residence

    The European Commission is committed to the digitisation of the tax residence certificate. In this way it wants to ensure transparency and certainty about the identity of investors in securities traded on capital markets, withholders, financial intermediaries and Member States, as the case may be.

    If the taxpayer is a natural person, the digital tax residence certificate (eTRC) must include their name and surname and date and place of birth. On the other hand, if the taxpayer is an entity, it shall specify its name and its European Unique Identifier (EUID). In addition, in all cases it shall specify the tax identification number, the address, the date of issue, the period covered, the identification of the tax authority issuing the certificate. It shall also include any additional information that may be relevant where the certificate is issued for purposes other than the refund of withholding tax.

    Establishment and maintenance of a national register of certified financial intermediaries

    Member States that have established a system for the refund of excess withholding tax levied on dividends on listed shares paid to investors resident in another Member State must have a national register of certified financial intermediaries. The aim is to facilitate the tracking of the flow of income along the whole chain of payments between intermediaries. From the issuer to the final recipient or investor.

    Two procedures to alleviate problems arising from over-retention

    The proposal for a directive provides for two types of procedures which Member States may apply individually or in combination:

    • The exemption procedure at source. The reduced tax rate or exemption is applied directly at the time the dividend/interest is paid.
    • The procedure for the rapid repayment of excess withholding. A fast-track refund procedure within a maximum of 50 days from the date of payment of the dividend or, as the case may be, the coupon date.

    When will the Faster Directive enter into force

    This is a proposal for a directive that is in the early stages of the procedure and is therefore still subject to changes during the process. It is expected to be approved by 31 December 2026 and its measures will apply from 1 January 2027. If you have any doubts about how the Faster Directive affects your company’s M&A processes and you need advice, please contact us.

  • More than a third of M&A deals leak to the press

    Seeing the details of an M&A (merger and acquisition) process published in the press can greatly complicate negotiations. In any M&A transaction, it is essential to maintain confidentiality throughout the entire process until the M&A transaction closes with the signing of the sale and purchase agreement in front of a notary. And yet, a recent report by the global strategic communications advisory group H/Advisors reveals that one in three M&A deals of $2 billion or more is reported to the media before it has been officially announced.

    After analysing 267 transactions in 2022, the study shows some clear trends as to which M&A deals are most likely to leak to the press:

    • By region, deal negotiations in Western Europe and Asia-Pacific are more likely to leak before they are officially announced than deals taking place in the United States.
    • By sector, the sectors with the highest leakage rates are aerospace, defence and consumer goods, with companies owning high-profile brands.
    • Depending on the volume, large transactions with a value of USD 25 billion or more are leaked up to 80 per cent of the time.

    At Confianz we cannot stress enough the importance of being prepared for this eventuality during an M&A process. These operations are complex events and any leak can have a negative impact on the negotiation. For this reason it is necessary to foresee a quick and professional response.

    3 reasons why confidentiality is crucial in M&A processes

    When handling any M&A transaction, confidentiality on the part of all parties is crucial. The reasons for this are manifold and include:

    • Prevent competitors from taking advantage of any leaked information to try to take customers away from the company for sale.
    • In the case of listed companies, to avoid falling share prices and speculative movements.
    • Keeping partners and employees calm, so that they are not assailed by uncertainty, demotivation and/or talent drain.
    • Protect the corporate reputation of all parties involved.

    Relying on a single advisor is the best way to ensure confidentiality

    Hiring a single law firm to handle the entire merger or acquisition process exclusively and carrying out all actions through it is the best way to avoid the publication of leaks in the press.

    This exclusivity allows, among others:

    • Ensure confidentiality. Because the fewer people who know the details of negotiations, the less chance there is of unwanted leaks.
    • Optimise all efforts. Because if several intermediary parties are involved, it is easy to end up with contradictory conclusions.
    • Work with a fluid and fast flow of communication. Because by limiting the number of actors in the negotiation, it is much easier to transmit information between all of them.

    Having a specialised M&A advisor such as Confianz throughout the entire process is the best basis for a successful transaction.

    Choosing the right advisor in an M&A transaction can be complicated. In such complicated negotiations, the human factor becomes fundamental. It is always best to turn to experienced professionals such as those at Confianz, who guarantee maximum discretion, absolute trust and impeccable professionalism. The studies and experience of our team, the satisfaction of our clients and our previous success stories are our best business card.

  • The eight types of inspections carried out by the tax authorities to monitor companies

    The tax authorities have intensified their surveillance through inspections of companies. According to the data for 2022 that have just been made public, almost 1.9 million extensive tax checks were carried out in that year. This is 5.2% more than in the previous year and 16.1% more than in 2020.  Advances in technology to detect unreported income or misapplied expenses by businesses have greatly facilitated this growth.

    At Confianz, we consider it vital that companies are prepared and well advised in this type of situation. Knowledge of the areas on which the tax authorities focus their attention can make all the difference.

    Among the most frequent reasons investigated were improperly applied VAT or personal income tax deductions, or income that has not been declared but appears in the Tax Agency’s databases.

    Inquiries and on-site visits to the company

    When there are discrepancies between the data in the Inland Revenue’s databases and those declared by the company, the Tax Agency usually verifies whether the company complies with its tax obligations. To do so, it uses two methods:

    • The requirement, which consists of a registered letter requesting documentation justifying part or all of the income and taxes declared. It also includes a form of representation to send the required information to the Tax Agency.
    • The on-site visit to the company, sometimes by surprise, is an option reserved for the most flagrant cases, the aim of which is to gather first-hand the evidence necessary to prove the alleged tax fraud. In 2022, 29,086 inspections of this type were carried out, most of them corresponding to files belonging to the so-called VAT Visits Plan 2022, where all possible frauds related to this tax are checked.

    The eight points on which the Tax Agency is focusing its attention

    The 1.9 million inspections carried out by the tax authorities on companies in 2022 are spread across these eight main areas:

    1. Enforcement

    It includes almost all of the management area’s checks on personal income tax, control of withholdings and other taxes, taxes declared after the deadline, etc.

    2. Control of economic activities

    It encompasses almost all the checks, requirements and visits to monitor the underground economy, undeclared income or even VAT or personal income tax deductions misapplied by the self-employed and small businesses.

    3. Formal checks

    They deal with all issues of formal defects in tax compliance and payment, as well as formal errors in invoices and accounting books.

    4. Equity and corporate analysis

    It encompasses all actions to monitor the assets of entrepreneurs operating through legal entities, in order to prevent them from linking their personal assets to those of their companies in order to evade taxes.

    5. Concealment of activity and abuse of corporate forms

    Along the same lines as the previous section, it investigates the misuse of legal entities to hide income obtained by individuals in order to obtain more tax advantages.

    6. Information analysis actions

    These are the checks that are carried out thanks to the detection of any tax irregularity through the Tax Agency’s computer systems. By cross-checking data, the tax authorities can check for misapplied deductions, undeclared income or any other infringement.

    7. Large companies, multinationals and tax groups

    This group includes all actions against companies with a turnover of more than six million euros to uncover any concealment of income, VAT infringements and other irregularities.

    8. Other verification actions

    They include all other actions, such as summonses, reports, analysis of complaints and actions to analyse taxpayers with the aim of ensuring tax compliance.

    At Confianz, we specialise in guiding companies and freelancers through each of these areas, ensuring compliance and minimising risks.