Labour inspection vs the Spanish Tax Agency: who does what

When an inspector arrives, the useful first question is not “am I in trouble?”, but “who is coming and what can they look at?”. The Labour and Social Security Inspectorate supervises compliance with social-order rules and demands the relevant responsibilities; the Tax Agency, in the inspection procedure, verifies and investigates proper compliance with tax obligations and, where appropriate, regularises through one or more assessments. They are not the same body or the same procedure. OEITSS, mission and functions; AEAT, inspection procedure.

This guide is for freelancers with staff, small companies and administration leads who receive a visit, a requirement or a notice and need to separate Labour from the Tax Agency before answering. Left out, except for a brief mention, are the Basque Country and Navarre in their foral track, the Canary Islands and IGIC, Ceuta, Melilla and the operating detail of inspector-function transfers to certain autonomous communities. The information is general: it does not classify your case or replace analysis of the real file.

If you already know the document is from the AEAT and want the full path of a tax inspection, use the Spanish tax inspection guide for freelancers and companies. If the problem is a first hire and the mistakes of the early months, see first-employee mistakes and labour inspection. The focus here is different: distinguish authorities, evidence and risks so you do not mix folders.

Two administrations, two risk maps

The ITSS is a public service of the social order. Its official mission includes supervision and control, technical assistance and, where appropriate, conciliation, mediation or arbitration. OEITSS, mission and functions; MITES, ITSS functions. The legal base of the system is Law 23/2015. Law 23/2015, Organising the ITSS System.

Social-order rules cover, among others, employment matters, risk prevention, Social Security, placement, employment, employment training, the social economy, migration and work by foreign nationals, and equal treatment in employment. The AEAT inspection procedure is meant to check what was declared and investigate tax-relevant facts that were undeclared or incorrectly declared. Law 23/2015, article 1.2; AEAT, inspection procedure; General Tax Law, article 145.

On the ground, that looks like this:

That table does not replace the concrete document. Letterhead and file subject beat the rumour that “someone is coming to inspect me”.

What Labour looks at — and what it does not

The ITSS inspection function includes supervision and enforcement in employment relations, prevention, Social Security, employment, migration and the social economy, among other legally assigned areas. Law 23/2015, article 12.1. If people work under your organisation and direction, the Workers’ Statute sets the framework for the employment relationship. Workers’ Statute, article 1.1.

Labour may care, among other things, about:

• whether contract, registration and contributions match the reality of the work;
• working time, time recording, overtime and rest;
• pay, payslips and items that should attract contributions;
• risk prevention, assessment, training and accident investigation;
• equality, representation and other employment guarantees;
• employment of foreign nationals and placement rules when they fall within scope.

It may also give technical assistance during the action and, in specific cases, mediate or arbitrate if the parties accept or request it. Law 23/2015, articles 12.2 and 12.3. That does not turn the inspector into your private adviser or a tax consultant.

What Labour is not: a procedure to assess VAT, personal income tax or corporation tax. It may examine documents with social-order relevance, including accounts or official returns when they serve that check, but its object is not to replace a tax inspection. Law 23/2015, article 13.3.c).

What the Tax Agency looks at — and what it does not

Tax inspection checks acts, elements and valuations entered in returns and investigates tax-relevant facts that were undeclared or incorrectly declared; where appropriate, it regularises through one or more assessments. AEAT, inspection procedure; General Tax Law, article 145.

Inspection powers allow examination of documents, books, main and auxiliary accounts, invoices, supporting evidence, correspondence with tax relevance, databases, programs and computer records, and inspection of assets and businesses needed to enforce tax obligations. General Tax Law, article 142.1. The taxpayer must attend and cooperate; appearance may be required with the requested documents. General Tax Law, article 142.3.

The Tax Agency is not, by itself, the authority that grades risk prevention or applies the social-order sanctioning framework. It may look at payslips, withholdings or invoices to freelancers because they have tax relevance. That does not make it Labour Inspection. The Spanish tax inspection guide covers deadlines, scope and the first 24 hours when the file is clearly AEAT.

How each action starts

The ITSS always acts of its own motion: by superior order, plans or programmes, a reasoned request from other bodies, a complaint or the inspector’s initiative, under effectiveness and opportunity criteria. Law 23/2015, article 20.3. Complaints of social-order breaches are public, with limits on anonymity and on the complainant’s role. Law 23/2015, articles 20.4 and 20.5.

The ITSS may act through an unannounced visit, a summons to appear with documents, an administrative file or verification of data from other administrations. The AEAT inspection procedure starts of its own motion; the start is notified and the file includes instruction, a hearing stage and signature of reports according to the report type. Law 23/2015, articles 21.1 and 21.2; AEAT, inspection procedure. Inspectors may enter freely into workplaces subject to inspection; if the workplace is also a natural person’s home, they need express consent or a court order. Law 23/2015, article 13.1.

Not every Tax Agency letter is an inspection: it may be a requirement, a limited check or another step. Reading the header confuses people less than assuming the worst case.

Deadlines you must not mix

For the ITSS, verification actions must not stretch beyond nine months, unless delay is attributable to the inspected party; they may be extended by a further period of up to nine months in cases of special difficulty, concealment or obstruction, or international cooperation. They also must not be interrupted for more than five months, with listed exceptions. Law 23/2015, article 21.4.

For the Tax Agency, the general inspection-procedure deadline is 18 months. It becomes 27 months when, among other circumstances in article 150 of the General Tax Law, annual turnover reaches the audit threshold, the taxpayer is in a group under consolidation or special group checking, or Complementary Tax is being checked. General Tax Law, article 150.1.

If someone tells you “all inspections last the same”, be sceptical. Note the date of the first visit or effective summons for Labour, and the date of the start notice for the Tax Agency. Timing is not cosmetic: it shapes submissions, extensions and the internal pressure of the file.

Documents: two folders, not one drawer

For Labour, the inspector may examine on site books, records, programs, official returns and accounts; registration, affiliation, joining and leaving documents and contribution or benefit evidence; pay evidence; prevention documentation; and any other materials related to the matters under inspection. They may require presentation at public offices and, if held electronically, a workable compatible format. Law 23/2015, article 13.3.c).

A useful ITSS folder often includes:

• contracts, annexes, working-time agreements and time records;
• registrations, leaving records, TC forms or equivalents and contribution proof;
• payslips, receipts and proof of payment;
• risk assessment, prevention plan, training and PPE;
• rotas, work reports and, where relevant, temporary-agency or contractor papers;
• a short note explaining who works, where and under what real organisation.

For the Tax Agency, prepare what the scope asks for: period returns, register or accounts, issued and received invoices, statements linking receipts and payments, contracts with tax relevance and any evidence of the questioned transaction. Do not send “everything employment-related” because it feels convenient. The notified scope delimits; expanding it is a decision, not a reflex.

If you are ordering the tax side after a requirement or an inspection start, the Spanish tax inspection guide helps index evidence without improvising stories. If the mess comes from a poorly closed first hire, first-employee mistakes in the first 90 days often explain gaps in registration, working time or prevention before an inspector appears.

What each file can produce

After verification, the ITSS may warn or require, open a sanctioning procedure with infringement reports, issue contribution assessments for Social Security debts, promote registrations or classification rulings, order stoppage of work where there is serious and imminent risk, or adopt other measures provided by law. Law 23/2015, article 22. The social-order infringement and sanction regime sits in the consolidated LISOS text. Royal Legislative Decree 5/2000.

Facts recorded in infringement and assessment reports, meeting the legal requirements, carry a presumption of accuracy, without prejudice to contrary proof. Law 23/2015, article 23.

At the Tax Agency, the inspection procedure may end in an assessment. The procedure sheet itself summarises agreement, disagreement and settlement reports, with different timelines until the report becomes final or an express assessment is issued. AEAT, inspection procedure. Tax inspection reports have their own regime in the General Tax Law; do not treat them as an “employment note” with a different letterhead.

Where facts overlap without merging procedures

There are zones where the same fact feeds different readings. A common example: someone invoices as a freelancer but works under another party’s organisation and direction. The Workers’ Statute defines the employment relationship by those features; the contract label is not enough. Workers’ Statute, article 1.1. The ITSS may act on registration, contributions, a labour infringement or a contribution assessment. In parallel, that same fit can affect withholdings, deductions or the tax characterisation of payments. That does not mean a Labour visit “opens” an AEAT inspection automatically, or the other way round.

Another typical overlap: payslips and withholdings. Labour checks whether pay and contributions follow the social order. The Tax Agency checks whether withholdings, payments on account and declared bases match the tax obligation. Sister questions, not identical ones.

A third case: expenses and suppliers. The Tax Agency questions whether an invoice is real or business-related. Labour may care if there is unregistered staff or irregular labour supply behind it. Again, separate evidence: the folder that proves a supplier’s service is not the same as the folder that proves an employee’s working time.

Practical rule: if the document speaks of taxes, periods, models or a tax assessment, treat the file as AEAT. If it speaks of the social order, contracts, working time, prevention, registrations, contributions or a labour infringement report or contribution assessment, treat it as ITSS. When the same fact can be read in both worlds, separate folders, contacts and deadlines; do not send the same narrative to both bodies. AEAT, inspection procedure; Law 23/2015.

Frequent objections that make the file worse

“I’ll just give them everything.” Dumping folders without an index mixes irrelevant facts with relevant ones and creates contradictions nobody asked for. Deliver what was required, date and sign what you hand over, and keep a copy.

“If it’s Labour, only the employment lawyer; if it’s Tax, only the tax adviser.” In a small SME you usually still need an internal coordinator who knows where the files are, even if a professional signs the reply. The adviser does not replace access to the evidence.

“I have no staff, so Labour won’t touch me.” The ITSS also looks at Social Security, prevention when there are workers, irregular employment, work by foreign nationals and other social-order matters. A freelancer without employees may sit outside some employment controls and still be affected if people provide services under their real organisation.

“I’ve been reported, so the complainant runs the file.” Complaints are public, but the complainant is not generally an interested party in the investigation phase; information rights are limited when the outcome affects their rights. Law 23/2015, article 20.4.

“Better invent a quick explanation.” ITSS reports enjoy a presumption of accuracy for facts recorded under the legal requirements. Law 23/2015, article 23. At the Tax Agency, assessments are built on the file. A rushed oral version tends to stick to the story.

First hours: a checklist without theatre

1. Identify the body: OEITSS/ITSS, Provincial Inspection, AEAT, Delegation, or other. Note the file number and the notification or visit date.
2. Separate the subject: social order versus taxes and periods. If the text is ambiguous, do not improvise; ask for clarification through the channel in the document itself.
3. Name a single internal contact and decide whether a representative acts. Avoid three people giving three versions.
4. Preserve originals and the state of systems: do not delete emails, clockings or invoices “because they look bad”.
5. Index the requested evidence. Deliver only what the requirement or scope asks for, with an index and a hash or file list if the volume is large.
6. Check internal contradictions before sending: contract versus schedule, payslip versus transfer, invoice versus delivery note, registration versus the real first day of work.
7. If the file is AEAT, follow the sequence in the tax inspection guide. If the origin is a defective first hire, cross-check with first-employee mistakes.

Limitations and exceptions that matter

This guide is general information for Spain’s common territory. It does not decide your file, does not replace labour or tax advice and does not cover in detail transferred regional inspector models, foral regimes, the Canary Islands/IGIC, Ceuta or Melilla. A factual overlap between employment status and tax does not imply a single joint procedure. Law 23/2015.

Law 23/2015 itself recognises a shared model with autonomous communities and mentions transfers of the public inspector function, so organic or functional dependence can vary by territory and matter. Law 23/2015, preamble and institutional system. Always check the letterhead of the body acting.

It also does not cover here every LISOS infringement type or every surcharge or stoppage scenario. Where there is serious and imminent risk, the law allows an immediate order to stop work; that is a specific prevention measure, not a “tax shutdown”. Law 23/2015, article 22.12.

Frequently asked questions

Are Labour Inspection and the Tax Agency the same thing?

No. The ITSS supervises social-order rules: employment, prevention, Social Security, employment policy and related matters. The AEAT verifies and investigates compliance with tax obligations and, where appropriate, regularises through assessments. OEITSS, mission and functions; AEAT, inspection procedure.

Can Labour Inspection enter without prior notice?

Yes. Law 23/2015 allows workplace visits without prior notice. If the workplace is also a natural person’s home, express consent or a court order is required. Law 23/2015, articles 13.1 and 21.1.

How long can each type of inspection last?

For the ITSS, verification actions must not stretch beyond nine months, extendable by another nine in listed cases. For the Tax Agency, the general inspection-procedure deadline is 18 months and 27 months in the cases in article 150 of the General Tax Law. Law 23/2015, article 21.4; General Tax Law, article 150.1.

What documents does each one ask for?

The ITSS usually focuses on contracts, working time, payslips, registrations and contributions, prevention and other social-order records. The Tax Agency looks at returns, invoices, accounts, supporting documents, databases and any information with tax relevance within the notified scope. Law 23/2015, article 13.3.c); General Tax Law, article 142.1.

Does a labour problem automatically become a Tax Agency inspection?

Not automatically. They are separate procedures, with their own rules and outcomes. A labour or Social Security fact can have a separate tax reading, but that does not turn a Labour visit into a tax procedure or authorise mixed replies.

What should I do on day one if I do not know who is inspecting me?

Read the whole document: letterhead, body, file number, subject, deadlines and documents. Keep originals, name a single contact person and do not send an improvised package. If it is the AEAT, use the tax-inspection guide; if it is the ITSS, organise the employment and Social Security folder.

Concrete next step

Before you write an email or hand over a USB stick, do three things in this order: identify the body and subject on the official document; open only the folder that matches that subject; and book with your employment or tax adviser — whichever matches the letterhead — a review of internal contradictions before the first submission. If the file is clearly AEAT, work with the Spanish tax inspection guide. If the origin is a recent poorly documented hire, fix the operating gap with the first-employee mistakes guide without confusing that fix with the reply to the inspector.