Dear friends, according to recent news which have been shared across diverse social networks, Federal Courts allegedly issued a constitutional ruling compelling the Federal Executive Branch to remit certain taxes, as a result of the current epidemic related to COVID-19.
We therefore recognize the importance of providing accurate information in connection with the situation referred above.
First, it should be pointed out that the resolution does not qualify as a ruling which definitively settles constitutional trial, but is rather a procedural resolution related to the suspension of an act issued in the course of handling the constitutional trial, which by its very nature, is not definitive, since it could be appealed before a higher court and eventually reversed.
The resolution was granted for the following specific purposes:
“In order for the authority to grant the appropriate measures and actions to comply with the article 39, section I of the Federal Tax Code, regarding the following matters…”
In this context, such article textually states:
“Article 39.- The Federal Executive through general resolutions may, If considered appropriate:
1. Relieve or exempt, totally or partially, the payment of contributions and its accessories, authorize its payment in installments, deferred or in parts, when it has affected or is trying to prevent any place or region of the country, a branch of activity, the production or sale of products, or the realization of an activity from being affected, as well as in the case of catastrophes suffered by meteorological phenomena, plagues or epidemics…”
Thus, the suspension resolution order to issue the appropriate measures and actions set out therein, however, the resolution fails to establish the guidelines for such purpose, but rather merely order to issue thereof.
The measures referred to in the cited article 39 of the Federal Tax Code, are considered as a power of the Federal Executive and not as an obligation, that is to say, as a facultative attribution.
We consider that the legal strategy followed in this lawsuit is not the appropriate solution to mitigate the consequences that are currently being faced by the industry in Mexico, as a result of the Force Majeure Sanitary Emergency generated by the SARS-CoV2 virus (COVID-19).
This analysis is not exhaustive, nor is it studying the particular case of any of our clients and, consequently, does not constitute legal advice.
We recommend that if you have any questions or comments in relation to the above, please do not hesitate to contact us to discuss a particular case.
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