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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.
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