Reform on litigation regarding final tax credits

The purpose of this reform is to prevent the obstruction of collection procedures for final tax credits by taxpayers who have been assessed a tax credit that has become final.

The reform modifies the system for challenging tax credits through the revocation appeal, annulment trial and amparo trial, applicable to two specific scenarios:

1. Final tax credits.
2. Resolutions on requests for prescription of final credits.

Final tax credits are those determined by the tax authority that have already been challenged and confirmed by a resolution of the competent authority. In other words, taxpayers have definitively lost the appeals and trials filed, having exhausted all means of defence.

According to data from the Tax Administration Service (SAT), two out of three tax credits are in litigation, and these can take between four and up to twenty years to resolve. This is because taxpayers often file means of defence against collection procedures and enforcement of judgments regarding final tax credits, not with the aim of exercising their rights against acts of authority, but to obstruct the administrative enforcement procedure.

Main changes in tax matters

Revocation appeal

The project adds grounds for inadmissibility of the revocation appeal, specifically when dealing with tax credits determined in final resolutions or regarding determinations that resolve requests for prescription of those credits. This closes the possibility of improperly reopening litigation on issues already settled.

This adjustment has a positive impact in terms of legal certainty and administrative efficiency, as it prevents tax authorities from facing repetitive and pointless appeals, which hinder collection and unnecessarily overload the tax justice system.

Annulment trial

The reform proposes to exclude from the jurisdiction of the Federal Court of Administrative Justice those tax resolutions that require payment of credits already determined in final assessments or acts that resolve requests for prescription of such credits.

According to the Senate’s opinion, this change prevents trials from being filed on acts that have already been definitively resolved.

Amparo law

It expressly establishes the forms of guarantee of the fiscal interest that individuals may provide to obtain suspension in amparo trials challenging acts related to the enforcement or collection of final tax credits. These guarantees will be:

• Deposit slip issued by an authorised institution.
• Letters of credit issued by credit institutions registered with the SAT for this purpose.

Furthermore, the reform to the Amparo Law establishes that it will be retroactive, and that cases pending at the time the reform enters into force will continue to be processed until their final resolution in accordance with the provisions of this reform.

Secondly, it provides that provisional suspensionwill never apply in cases of bank account seizures suspected of being used for money laundering. On the other hand, definitive suspension may be granted to allow the use of immobilised funds if their legality is proven. Suspension — whether provisional or definitive — will also not apply if it prevents or hinders the State from exercising its powers regarding public debt.

Do you have questions about how this reform may impact your company or tax situation? Consult our tax experts for personalised advice and understand how to correctly apply these provisions in each specific case.