Economists and market analysts are closely watching the recent actions of the Agencia Estatal de la Administración Tributaria (AEAT), Spain’s State Tax Administration Agency. The agency has launched an extensive inquiry into more than 400 petrol stations across 14 autonomous regions of Spain. The investigation is aimed at uncovering potential VAT fraud schemes in the hydrocarbon sector. Interestingly, the regions of País Vasco, Navarra, and Canarias have been left untouched by this operation due to their distinct fiscal systems and regulations.
The AEAT has dubbed this operation as ‘Fuel‘. Following a series of irregularities observed in the pricing of fuels, the agency decided to initiate this operation on Monday and completed it by Tuesday. The investigation is primarily focused on service stations that have been consistently selling fuel at abnormally low prices. In addition to this, they have been demanding information on their suppliers, supply prices, and even the origin of their products. Their aim is to ensure that these service stations are not breaching the Ley de Hidrocarburos (Hydrocarbons Law) enacted on March 28.
The recent amendment to the Hydrocarbons Law, which came into effect on March 28, prohibits wholesale operators from selling to any company other than other wholesale operators or fuel distributors. Similarly, retail distributors are not allowed to sell to other retailers or wholesalers. The law is aimed at curbing the use of marketers or intermediaries in carrying out and concealing VAT fraud in the sector. Such fraudulent activities not only deprive the treasury of its rightful income but also create an artificial reduction of prices, causing unfair competition in the sector.
In recent years, the AEAT has observed a significant rise in fraudulent activities in the hydrocarbon sector. These activities often coincide with significant increases in fuel prices due to market conditions. The agency has noticed that fraudulent entities often use instrumental societies to avoid paying the corresponding VAT. This was evident in the 2023 operation codenamed ‘Memorable‘, which estimated defrauded quotas to be around 100 million.
The AEAT has also conducted numerous investigations that have been resolved administratively and others concerning money laundering related to this type of fraud. In 2022, an operation dubbed ‘Petro‘ detected money laundering activities worth around 100 million.
The Asociación Nacional de Estaciones de Servicio Automáticas (Aesae), a national association of automated service stations, has recently warned the Agency about a «blossoming fraud» in the fuel market. According to Aesae, the tax evasion, particularly in automotive diesel, could potentially create a gap of about 1,000 million euros this year.
Over time, the Tax Agency has successfully dismantled numerous VAT fraud schemes in the sector and continues to conduct several investigations along similar lines. For instance, in late April, one of the cheapest petrol stations in Spain located in Xàtiva was shut down due to suspected involvement in such fraudulent activities.