Félix Daniel Laguna (coord), Francisco Velasco Caballero, César Martínez Sánchez, Félix Vega Borrego, Diego Marín-Barnuevo Fabo, Ester Marco Peñas, Instituto de Derecho Local, Universidad Autónoma de Madrid
Taxes in a broad sense account for approximately 59 per cent of the resources of municipalities on average, dropping to 50.6 per cent in the case of small (rural) municipalities – those accounting for less than 5,000 inhabitants. These figures show the relevance of local taxes to any municipality. Nevertheless, it is well known that rural municipalities face enormous challenges when it comes to the management, auditing, and collection of local taxes and other sources of public income. The technical, organizational and even economic complexities inherently related to the size of these municipalities explain that they usually resort to upper-tier local bodies to fulfill their duties in terms of management, collection and, to a less extent, auditing of taxes.
Municipalities rule autonomously their taxes and do it so concerning their management, collection, and auditing within the limits of the state law and other possible regulations. Nevertheless, they may also delegate the management, collection, and auditing of their taxes and other public sources of income to upper-tier local bodies (e.g. provinces) or the autonomous regions (comunidades autónomas). Actually, upper-tier local bodies like provinces legally aim at assisting small and medium-sized municipalities within their territory in different matters including taxation. Among different possibilities, the province may create an autonomous public body (single purpose body) to centralize the management, collection, and auditing of taxes of municipalities within its territory that may be willing to delegate such legal competences.
The analysis of this particular practice aims at confirming whether it is possible to alleviate the great differences between rural and urban municipalities concerning the efficiency and effectiveness of their own local tax systems by centralizing revenue and costs. This practice may ease the excessive burden of technical, organizational and economic resources that rural municipalities face with respect to their own tax system and may even allow fulfilling functions that would not be possible to fulfill without the assistance of the province due to the scarce resources and financial situation of rural municipalities. Nevertheless, it is relevant to highlight that several upper-tier bodies not only have competences and functions stemming from rural municipalities but also from larger ones. This might be because these bodies become a sort of technical specialized unit on taxes that allows them to better fulfill such functions and competences in terms of revenue and costs. In this regard, it might also be worth analyzing whether these bodies actually treat on an equal footing both urban and rural municipalities and whether the delegation of competences by larger municipalities to the relevant body does not undermine the legitimate interests and needs of rural municipalities.
Provinces may create Single Purpose Bodies (Organismos Autónomos Provinciales – OAPs) aimed at fulfilling the functions and competences delegated by municipalities in terms of management, collection, and auditing of taxes, as well as other public sources of income.
When established, municipalities within the province may delegate to the OAPs specific functions related to their local tax system that may go from one single tax and one single competence (management, collection or auditing) to all taxes and other sources of public income and all the competencies within the boundaries of the state law. In this regard, Article 7(3) TRLHL lays down that the delegation agreement must consider the extent and content of the delegation. It is relevant to point out that municipalities might revoke the delegation agreements at any time.
OAPs act vis-à-vis third parties (e.g.taxpayers) on behalf of the municipalities that have delegated functions and competencies to them and do it so to the extent of the delegation agreements. The exact scope of their competences and functions relate to the content of the delegation agreements.
The territorial scope of OAPs is extended to the province and this may facilitate (and sometimes enable) the management, auditing, and the collection of the taxes in municipalities other than the ones they stem from.
OAPs usually charge municipalities a specific percentage depending on the different delegated functions and competences as well as on the collection of taxes and other public sources of income.
Municipalities may receive a down payment for the expected collection of taxes, especially when it comes to specific local taxes such as Impuesto Sobre Bienes Inmuebles (Local Property Tax) and Impuesto Sobre Actividades Económicas (Local Trade Tax) as considered in Article 149(2) TRLHL.
According to data collected in 2015, 25 out of 50 provinces created OAPs, and approximately 4,373 out of 8,131 municipalities have delegated some types of competencies and functions on management, collection, and auditing of local taxes and other sources of income, such as fines, to their respective OAP. The competences and functions of the different OAPs depend on the delegation agreement made by municipalities, as already considered. Moreover, it is worth mentioning that the amplified territorial scope of the OAPs in comparison to each municipality on the collection of taxes has been proved the advantage of this delegation system.
Not only there have been achievements in terms of tax collection, also from the legal point of view, OPAs have raised issues and some legal changes that have turned out to be very beneficial for the municipalities (specially for small municipalities, due to the inability of carrying them out by themselves). For example, the request of large amounts from the state as compensation for bonuses granted to toll highways; or the amendment of the legislative framework to recognize the possibility of delegating the powers of management, inspection, and collection of non-public law income.
Having said all that, and given the differences among OAPs, the analysis of this practice has focused on the cases of Alicante and Barcelona taking into account e.g. the number of delegation agreements (141 and 309, respectively) and their figures on the collection of taxes (EUR 817.085.844,96 and EUR 1.888.750.842,79, respectively), among other reasons.
The Barcelona OPA (Organisme de Gestió Tributària of the Province of Barcelona) is a good sample for a comparative analysis of tax collection delegations to the same upper-tier local body by so much small as also medium-sized and large municipalities. Delegations agreed by large municipalities with the OPA seem to be not as effective and sustainable as delegations agreed with small or rural municipalities. The delegation of tax collecting powers to the OPA by one or several large municipalities must properly dimension the material and personal resources that the management of the income of those municipalities will require. As an example, the delegation of the collection of fines from the Barcelona City Council was canceled because it absorbed excessive resources from the OPA (Organisme de Gestió Tributària)
In general terms, certain complex management functions (such as the granting of tax benefits or the inspection of public domain rates) are better carried out directly by municipalities than by a delegated OAP. On the contrary, delegation to an OAP proves more efficient for taxing functions which are less complex, such as the simple collection of the debts, as this is a task more likely to be computerized and treated with uniform procedures. This output suggests that only small municipalities should delegate wide tax managerial functions to the corresponding OAP, while large municipalities should delegate only the sheer tax collection.
Barquero Estevan JM, ‘Delegaciones, convenios y otras técnicas de colaboración en la gestión de los tributos locales’ (1999) 29 Revista de Hacienda Local 91
—— Gestión tributaria y relaciones interadministrativas en los tributos locales (RDU 1999)
Marín-Barnuevo Fabo D, ‘La colaboración entre administraciones como medio de superación de problemas en la recaudación de los tributos’ in Fernando Serrano Antón (ed), Problemática de los procedimientos tributarios en las Haciendas Locales (Civitas 2012) Pérez Bernabéu B, ‘Los organismos autónomos provinciales de gestión y recaudación tributaria como nuevas fórmulas de gestión tributaria en la hacienda local: Suma’ in Pilar Cubiles Sánchez-Pobre, Maria del Mar Jiménez Navas and Ana M Fernández Gómez del Castillo (eds), El derecho tributario en tiempos de crisis económica: opciones de política fiscal (Hispalex 2011)
 See Ministerio de Hacienda, ‘Haciendas locales en cifras – Año 2017’ (2019) 43.
 ibid 44. It is relevant to recall that more than 80% (84.01%) of the 8,131 municipalities in Spain count less than 5,000 inhabitants. Ibid 12.
 As mentioned in the Introduction to Local Financial Arrangements in Spain, report section 3.1.
 See Art 106(1) and (3) of Law no 7/1985, of 2 April, on Local Government Basic Regulations [Reguladora de las Bases de Régimen Local] (hereinafter, LBRL).
 See Art 106(3) LBRL. See also Art 7 of Royal Legislative Decree no 2/2004, of 5 March,approving the consolidated text of the Local Finance Regulatory Act (hereinafter, TRLHL).
 See Arts 26 and 36 LBRL.
 With respect to the upper-tier local body created by the Province of Alicante, it is relevant to highlight, for instance, the municipalities of Altea, Benidorm, Calpe, Orihuela and Torrevieja (≈ 22,000, 69,000, 22,000, 77,500 and 83,000 inhabitants, respectively). SeeSpanish National Statistics Institute, ‘Cifras oficiales de población resultantes de la revisión del Padrón municipal a 1 de enero’ (Instituto Nacional de Estadística, 27 December 2019) <https://www.ine.es/dynt3/inebase/index.htm?padre=517&capsel=517> accessed 22 July 2020.
 See Irene Belmonte Martín and Josefa Luna Martínez, ‘El Mapa de la gestión tributaria local en España. Una primera aproximación al diseño de indicadores para su evaluación’ (XII AECPA Congress, San Sebastián, July 2015) 7-9 <https://aecpa.es/es-es/el-mapa-de-la-gestion-tributaria-local-en-espana-una-primera-aproxima/congress-papers/1322/> accessed 24 June 2020.
 See, for instance, the municipalities and functions delegated to the OAP of Barcelona (Organisme de Gestió Tributària – ORGT) in the following link, <https://transparencia-orgt.diba.cat/sites/transparencia-orgt.diba.cat/files/public/node-fitxers/a_-_quadre_delegacions_ajuntaments_2.xls#overlay-context=quadre-delegacions-ajuntaments> accessed 24 June 2020.
 See, with respect to Alicante, ‘Memoria Anual 2018’ (SUMA and Fundación Pequeño Deseo 2018) 9 <https://www.suma.es/memorias/2018/2018MemoriaSuma.pdf> accessed 22 July 2020, and, with respect to Barcelona, Organisme de Gestió Tributària – Diputació Barcelona, ‘Memória de l’exercici 2019’ 13 <http://transparencia-orgt.diba.cat/sites/transparencia-orgt.diba.cat/files/public/node-fitxers/memoria_orgt_2019.pdf> accessed 22 July 2020.