Tax Bulletin

March 2017

Tax Information

Current Base Salary
(January 1st, 2017)
Current Interest Rate
(October 1st, 2016)
Late payment penalty rate
(month or part month)
Reference Exchange rate BCCR
(March 1st, 2017)
Buy: ¢554,97
Sell: ¢567,96

Effects of the annulment of section 144 of the Tax Code according to the Administrative Court of Appeals

Due to the recent annulment of section 144 of the Tax Code by the Constitutional Chamber of the Supreme Court through the historic ruling No 12496-16, the Administrative Court of Appeals issued on  February 24th 2017 ruling No 26-2017-VI in which it declares, in accordance with sections 166 and 167 of the General Law of the Public Administration, the absolute nullity of the income tax assessment and its sanction imposed by the Tax Administration since such were based on the provisions of the annulled section 144 of the Tax Code.

With regard to the extension of the effects of the nullity declared by the Constitutional Chamber of the Supreme Court in its ruling No 12496-16, the Court indicates that it effects are previous with the only exceptions of the rights acquired in good faith, and the legal situations consolidated by a judgment with authority considered of material res judicata, or have reached its limitation period or statute of limitations. Therefore, in all other cases, the declared unconstitutionality and annulment of section 144 of the Tax Code has retroactive effects.

In addition, the Administrative Court establishes that, according to section 164 of the General Law of the Public Administration, the collection actions carried out by the Tax Administration and which triggered the payment by the taxpayer, are also null, therefore, it is necessary to return the canceled sums to the taxpayers as it is considered an improper payment.

It should be noted that this ruling constitutes an important precedent (although it may be reviewed by the First Chamber of the Supreme Court of Justice), for taxpayers who have canceled the additional tax quota determined by the Tax Administration, and for cases that are not within the exceptions of the reach of the annulment indicated by the Constitutional Chamber of the Supreme Court.

The above will allow tax payers to question any assessment payment made through a Settlement Act Officio not annulled to this date, and gives the possibility to petition the repayment of any canceled sum in addition to the corresponding interests.

Tatiana Martinez
Tax & Legal Services

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see to learn more about our global network of member firm.

Deloitte provides audit, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries and territories bringing world-class capabilities, insights, and high-quality service to address clients’ most complex business challenges. To learn more about how Deloitte’s approximately 245,000 professionals make an impact that matters, please connect with us on FacebookLinkedIn or Twitter.

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.

Did you find this useful?