Two CERCA centres have started a redundancy programme. Both have done so for very different reasons.
In one case, it was a small centre X whose research groups have been transferred to other centres, while those who could not be transferred, mainly from the centre X administration department, were made redundant before centre X disappeared.
The situation is very different in the other case. This is a CERCA centre, a large one, working in a strategic field for the country and the EU, involving many European projects and private sector contracts. At centre Y there are numerous specific operating issues, such as the forthcoming move of its physical location and renegotiating trustees’ contributions. But these were not the reasons why centre Y had to lay off workers. The reason is none other than a conflict over VAT rebates.
Some years ago inspector Z, whose name I will spare you (and it is important to note that it is often the same inspector Z) carried out an inspection at centre Y, which, like all centres in Spain, was claiming VAT rebates of between 80% and 100% of the going rate. The inspection resulted in centre Y having a 0 (zero) VAT rebate. This was the start of an intense legal battle, which is still on-going. It should be stressed at this point that the amount questioned by the Spanish tax office was approximately 4 million euros for centre Y. Recent appeals lodged by the centre with the Tax Agency have been rejected and centre Y has had to guarantee (freeze) the 4 million euros in its accounts while the legal battle continues, which ha already reached the Economic Administrative Court.
There are a number of points that need to be made here. Inspector Z has already carried out inspections at other CERCA centres with the same hard-line attitude and arguments. There is some suspicion as to whether Tax Agency inspectors’ pay rise is linked to the money they recover for the State through their actions. Whatever the case, up to now there has not been much control or coordination in the Tax Agency in Catalonia to ensure the same criteria are applied to all inspections of CERCA centres, leading to somewhat surprising results, as described here.
Losing 4 million euros has had a devastating impact on centre Y. It will probably have to halt its planned relocation and look to downsize. But the most dramatic aspect is that centre Y is now looking to make redundancies because it has to try and cut its wage bill and become financially viable. Y’s management and board of trustees have never wanted to reduce staff numbers but the severity of the Spanish tax authority’s actions in this case has led directly to such a situation.
The sad part of it all is that experts say this decision on the tax rebate will be fully or partially reversed and defeated in the courts in a few years. But by that time, inspector Z will no longer remember the case that has shocked centre Y, while the workers at centre Y now being laid off will no longer be employed at the centre.
In a normal country, a research centre in a strategic sector should not be seriously affected by the whims or questionable professionalism of an inspector.