New audit actions linked to advanced cooperation mechanisms in tax matters: special reference to ‘joint audits’

Order PJC/1000/2025 of 10 September, amending Order PRE/3581/2007, of 10 December, establishing the Spanish Tax Agency’s departments and assigning them roles and responsibilities, was published on 13 September 2025.

In order to adapt the Tax Agency’s departments roles to new mechanisms of tax-related administrative cooperation that impinge on audit activities, a new paragraph 6 has been added to Article 5(1) of the aforementioned Order of 2007 stating that the Department of Financial and Tax Audits is responsible for “the supervision, coordination and, where appropriate, participation in administrative cooperation activities carried out with tax authorities of other States and having an impact in the field of financial and tax audits, such as joint audits, simultaneous checks or the presence of officials from other States in the offices of authorities”.

This change, insofar as it refers to joint audits, must be considered in relation to the regulation introduced in Article 177 quinquies of the Taxation Act through Act13/2023, which amended that legal text to transpose Council Directive (EU) 2021/514 (DAC7).

We should recall that a joint audit is an advanced form of administrative cooperation introduced into European legislation by the aforementioned DAC7, which defines it as “an administrative enquiry jointly conducted by the competent authorities of two or more Member States, and linked to one or more persons of common or complementary interest to the competent authorities of those Member States”. It is thus a mechanism that goes beyond the mere exchange of documents between tax authorities and whose main objective is to verify compliance with tax obligations in cross-border transactions.

This mechanism has several precedents in various documents and reports that in some cases advocated the conduct of audit checks and enquiries in a single procedure, a position that DAC7 does not share, opting instead for the coexistence of parallel procedures in different States. Accordingly, joint audits do not constitute a common administrative procedure of the Member States concerned with the interested parties, since the latter’s tax debt can only be the outcome of the respective national audits.

In accordance with both DAC7 and the Taxation Act, joint audits have the following characteristics:

— They are mainly applied in the field of direct taxation, excluding levies such as value added tax, excise duties and customs duties, as these have harmonised regimes in the European Union with their own control and cooperation mechanisms.

— The main target of joint audits are multinationals with complex cross-border transactions, double taxation risk or significant transfer pricing issues.

— A joint audit, according to DAC 7, is triggered by a request from the competent authority of one or more Member States to the competent authority of another Member State. In principle, the minimum content of the notice of commencement of the audit is not specified, but it seems that it should refer to the facts of tax significance to which the checks and enquiries will be limited. Furthermore, DAC 7 establishes that the requested competent authority has 60 days to respond to the request for a joint audit, a point that is not included in the Taxation Act.

— Checks and enquiries relating to joint audits shall be conducted in a pre-agreed and coordinated manner. To this end, the Taxation Act provides that the Spanish tax authority shall, in all cases, appoint a representative responsible for relations with the other State or States involved in the joint audit and that, if the joint audit checks and enquiries are carried out in Spain, that representative shall be responsible for supervising and coordinating them.

— Furthermore, officials from the various States involved in the joint audit may actively participate in the territory of the other Member States, bearing in mind that their activities shall always comply with the legislation and procedural requirements of the Member State in which such activities are carried out at any given time, and that their rights and obligations shall also be determined in accordance with the legislation of that State. At the same time, it is established that they shall not exercise any powers that would exceed the scope of the powers granted to them under the laws of their State. Therefore, the actions of such officials are subject to a double limitation.

— It is important to note that the conduct of a joint audit does not require a common outcome once involvement is accepted, with DAC7 establishing that the authorities involved in the audit shall endeavour to agree on the facts and circumstances relevant to it, as well as to reach agreement on the tax position of the audited persons.

— Finally, the findings of the joint audit shall be incorporated in a final report that must be notified to the inspected persons within 60 days and that must reflect the issues on which the competent authorities agree, issues that pursuant to the Taxation Act must be taken into account in any tax procedures that may be conducted as a result of or as a follow-up to the joint audit. In addition, issues may be included on which no agreement has been reached, which may not be taken into account in internal procedures.

These are the main features of the joint audit referred to in the Annual Tax and Customs Control Plans since 2023 and promoted in the 2025 plan, which states that “the Tax Agency will increase its involvement in advanced administrative cooperation mechanisms, basically simultaneous multilateral controls and the new device, within the European Union, of joint audits, in force since 2024”.

Certainly, these joint procedures may offer taxpayers the opportunity to explain to the competent tax authorities the rationale behind their business model and the reasons justifying their operations and transactions, thus clarifying key issues regarding their structure and tax positions. However, there are several aspects that, at least for the time being, may limit the smooth functioning of this type of audit, such as the lack of human and technical resources in public bodies to carry them out; the disputes that may arise from competition between different authorities in order to impose their respective criteria on the others; or their limited legal framework, in some cases resulting from insufficient implementation by Member States of the aspects covered by DAC7.

In this regard, for example, the Taxation Act has not transposed the content of Article 12a(3)(b) of the Directive, in relation to the probative value to be given to the evidence collected in the joint audit, despite the important role that such evidence could play in any subsequent regularisation. Nor does the aforementioned law refer to the rights and obligations of persons subject to a joint audit, to which the Directive does refer in paragraph 3(c) of the aforementioned provision, stating that they must be the same as those that would apply in an audit involving only officials from that Member State.

From this perspective, it can also be noted that the report that concludes the joint audit — which, as already mentioned, does not end with a settlement — may contain relevant findings that have an impact on internal audit procedures which, where appropriate, will result in the regularisation of the taxpayer’s tax position. However, despite this, neither the Directive nor the Taxation Act provide for any procedure for submitting allegations either before or after its issuance, with the reduction in guarantees that this may entail.

Also in relation to the aforementioned final report, the Taxation Act states that the aspects it covers on which agreement has been reached between the participating States “shall be taken into account in any tax procedures that may be conducted as a result of or as a follow-up to the joint audit”. However, from this wording, similar to that contained in DAC7, it does not appear that such aspects have a binding effect on national audit procedures, so that such agreements could only be taken as a basis for reassessing the taxpayer’s tax position, with the legal uncertainty that this may entail.

In short, the functioning of joint audits requires improvements which, in principle, could take the form of further regulatory implementation, both at EU and domestic level, which, among other things, would delve deeper into the rights of taxpayers, seeking to strike a balance between these rights and the powers of the tax authorities in the context of the internal audit procedures followed after a joint audit.