Audits and taxpayers´ defense
The Project increases the digitalization of tax compliance (e.g., personal electronic file, e-mail notifications, document authorizations).
Rights of taxpayers
The principle of positive silence is introduced as a general rule. Under this principle, requests of taxpayers will be deemed accepted if they are not resolved within the legal term.
The IRS is prohibited from re-auditing or reviewing items, legal criteria or evidence that have already been subject to an inspection, even if the statute of limitations has not yet applied.
Statute of limitations
The IRS is prohibited from requesting documents beyond the statute of limitation period, even in the case of carried-forward losses and VAT credits and the determination of tax-adjusted equity (except for a well-founded resolution).
The IRS is prohibited from requesting solemnities or formalities that the law does not require for the relevant act, contract or operation. For the IRS to disregard the information provided by the taxpayer, based on that the information provided is not reliable, the IRS must issue a well-founded resolution, which may be challenged by the taxpayer through a tax claim.
Catalog of rights
The catalog of taxpayers’ rights is reformulated, reinforcing those that relate to the right to information, the recognition of the principle of good faith and respect to the principle of legality. A special administrative complaint is created.
Any changes of criteria or interpretations by the IRS that are favorable for taxpayers may apply retroactively, and taxpayers may request the refund of taxes unduly paid in the last three tax years.
Return of capital
The requirement to obtain authorization from the IRS is eliminated for capital reductions.
Review of technological systems
The IRS powers to authorize or require the taxpayer to use technological information systems to keep accounts and records, as well as to audit information of said systems are limited.
Conflict resolution procedure before the IRS
Voluntary administrative reconsideration (“RAV”, for its Spanish acronym)
- The Bill establishes, among other things, (a) that the taxpayer’s request will be deemed accepted if it is not resolved within 60 days; (b) that the taxpayer must be heard during the process; and (c) that, under certain requirements, forgiveness of fines and interest may be granted in this procedure.
- A new hierarchical appeal against the resolution of RAV is introduced to be resolved by the IRS national office, but only based on flaws or errors of law that have substantially influenced the decision of the Regional Director.
Settlements during tax litigation, and weigh of evidence
Amendments to the tax claim procedure
- Tax claim must be filed in 60 days before the tax court.
- The IRS is expressly authorized to accept a tax claim of the taxpayer.
- The submission of evidence that was not filed during the audit is allowed.
- The taxpayer may propose an extrajudicial settlement without desisting from the tax claim.
- The IRS may request judicial precautionary measures before notifying the taxpayer of a tax assessment.
Taxpayer’s protection office
- The taxpayer’s protection office is created as a new decentralized service, with legal personality and its own assets, subject to the supervision of the President of the Republic, through the Ministry of Finance.
- The purpose of the taxpayer’s protection office will be to ensure the free protection of the constitutional and legal rights of taxpayers, in matters that are the responsibility of the IRS.
- Operates upon request of taxpayers.
- It will have several attributions for the fulfillment of its object, such as:
- Counsel taxpayers regarding IRS’ acts that harm the rights of the taxpayers.
- Attain complaints made by taxpayers, which may lead to investigations and other measures.
- Promote mediation procedures and act as a third party in them.
- Issue non-binding public recommendations.
- Conduct or entrust studies that identify problems of a general nature, whether for all or a sector of taxpayers, and propose solutions to the IRS.
- Propose legislative changes in order to ensure respect for the rights of taxpayers in tax matters.
- Issue interpretations and technical opinions on tax regulations.
- Request the IRS to issue tax pronouncements on matters of public interest.
- Adopt advertising measures in order to inform taxpayers of their legal and constitutional rights.
- The opinions issued by the taxpayer’s protection office will be admissible as evidence in administrative and judicial proceedings.