A declaration of unconstitutionality has been given to the section of the tax code that allowed the Treasury to demand payment of penalties and interest allegedly owed on taxes before the right to a defense can be exercised.
The slowness and inefficiency with which the Taxation department processes tax disputes, sometimes involving decades before there is a resolution, led to the outlandish idea on the part of lawmakers of putting the cart before the horse.In order to solve the problem of stubborn evasions where people take advantage of the inefficiency of the Taxation department, a decision was made to take away from companies the right to contest the results of tax audits, forcing the taxpayer to pay the amounts ordered by these audits, within in a deadline of one month, in order to be able to initiate formal questioning of those results.Now, the Supreme Court of Costa Rica has taken away that power from the Taxation department, declaring it unconstitutional.
In Panama a new constitutional ruling prevents outsourcing of tax collections to private natural and legal persons, repealing a presidential decree.
The Supreme Court (CSJ) declared as unconstitutional paragraph 3 and subsequent paragraph of Cabinet Decree 109 of May 7, 1970 that allowed the public function of tax collections to be carried out by private individuals and corporations, which was aimed at monitoring the collection of taxes.
The Constitutional Court has rejected the constitutional challenge presented by the business sector and left in place the collection of 1.5% income tax.
The Supreme Court has confirmed the income tax of 1.5%, which applies to companies reporting net sales of over $456 000, leaving exempt from this charge those reporting lesser incomes and those with less than two years of being established.
The application of tax of $0.65 per mobile phone line that had been proposed by the Executive to fund part of the 2015 budget has been temporarily suspended.
The Constitutional Court temporarily suspended the collection of the tax on telephone lines after the Chamber of Industry and the three phone companies operating in the country submitted an appeal against the tax.
Ranging from law suits to revoke the decision, to a request for injunction against the Director of Taxation, legal measures are being taken by the guild in Costa Rica to get the collection of the sales tax suspended.
The decision to charge sales tax on companies offering tourist services, retrospectively since 2009, will generate the "... failure of many businesses," warn the authorities of the National Chamber of Tourism (Canatur).
The private sector has filed a constitutional complaint against Article 22-A of the Tax Act on income tax arguing that it distorts fundamental tax principles.
From a statement issued by the Honduran Council of Private Enterprise:
As entrepreneurs we have supported the planning processes of public finances to improve tax revenues and the controlling of public expenditure, which allow for the signing an agreement with the International Monetary Fund (IMF). Tax burdens should be clear and simple, non-discriminatory, fair and universal, as established by our constitutional system.
The union of private enterprises in Nicaragua is opposing the amendment to the Law on Tax Coalition.
The Superior Council of Private Enterprise showed its opposition to the reform of the Law on Tax Coalition. The head of the union, José Adán Aguerri said "we will file a constitutional appeal against decree 06-2014, and amendments and additions to this Law, published last week."
The Association of Banks of Panama has filed a lawsuit alleging that the concept of the tax retention agent is unconstitutional.
The Association of Banks of Panama (ABP) believes that the agreement which empowers the Panamanian municipality to select companies that bill more than $5 million as tax retention agents is unconstitutional. The agreement regulated in 2013 turns firms in auditors and collectors of tax for the municipal coffers.
The suits citing unconstitutionality presented in Guatemala against the tax reform have caused irrecoverable losses to government coffers.
The head of Collection at tax authority SAT said that " the reform does not only include income tax (ISR)" and noted that the Constitutional Court (CC), among other resolutions, suspended the collection of a 5% tax on the first registration of tractors (Iprima).
The Office of Administration agreed with the Chamber of Commerce in pointing out the unconstitutionality of the change in the method of paying income tax.
According to the Administration Office of Panama, the way that the regulation is applied does not meet public order reasons.
The Ombudsman considered that one of the five sections of Act 52 sued by the business association for being unconstitutional, does not comply with the provisions of the constitution.
Lawyers and auditors are contending that tax reforms in El Salvador have violated the principle of "those who earn more, pay more" and are preparing legal remedies.
Many companies are preparing to file law suits citing unconstitutionality over some of the amendments to the Law on income tax (ISR) which came into force on January 1st , because they believe that the approved taxes are "confiscatory" and makes them less competitive to the point of having to close down their businesses.
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