In Spain, as in most western countries, the concept of good corporate governance is no longer confined to the purely commercial arena and is now becoming an increasingly prominent feature of the tax landscape as well. On an international level, several years after it first rolled out its corporate governance principles back in 2004, the OECD began calling for tax matters to be included among those elements that could give rise to potential risks and which should fall under the purview of companies' governing bodies (General Administrative Principles: Corporate governance and tax risk management, 2009; the OECD Guidelines for Multinational Enterprises, 2011).
In Spain, the Code of Good Tax Practice, released by the State Tax Agency in 2010, sets out a series of recommendations or guidelines aimed at enhancing transparency and mutual trust, citing the information that should come before corporate governing bodies. Furthermore, the amendments to the Capital Companies Law to improve corporate governance, approved in December 2014, introduced obligatory good tax governance rules, albeit applicable exclusively to listed companies.
All signs indicate that good tax governance, cooperative relationships with tax authorities and enhanced tax compliance will continue to gain importance and sophistication in the short term. Spanish companies are aware of the advantages of being considered tax compliant and are therefore expressing more interest in this field.
Against this backdrop, the new quality standard UNE 19602 'Tax compliance management systems: Requirements and guidance' was released on February 28 2019. The standard was drafted by an expert committee of stakeholders, brought together by the Spanish Association for Standardisation (UNE). Much like the International Organisation for Standardisation's (ISO) quality standards, UNE 19602 aims to offer a model, standard or best practice, this time in the tax compliance arena.
The standard presents the high-level structure typical of all ISO international management system standards and aims to establish requirements and guidelines for adopting, implementing, operating and improving (at all organisational levels) all the elements comprising a complete tax compliance management system. In short, UNE 19602 aims to help organisations prevent and effectively manage their tax risks, by creating a culture of compliance.
The standard addresses key aspects to be considered when detecting and evaluating risks and when designing appropriate systems to manage them. It also envisages the mechanisms for periodically controlling and reviewing the procedures established under the framework of risk management systems and recommends that companies create tax compliance bodies to promote and supervise the implementation and efficacy of their systems, among other aspects.
Companies are also able to secure UNE 19602 certification through an independent tax compliance audit.
Spanish companies have yet to gain real-life experience in implementing the precepts under UNE 19602 (although experience has been gained with its predecessor, UNE 19601 management system for criminal compliance), it appears clear that adopting and implementing the standard and potentially securing certification under it will reduce companies' tax risks and enhance their tax compliance. In addition, by applying the standard, companies should be more likely to be classified as having a low risk of non-compliance with their tax obligations. Accordingly, they may be interested in securing certification not only for the aforementioned control of tax risks but also to heighten their image among their stakeholders.