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"Where the legislator does not provide, the taxpayer does not provide"
[/vc_column_text][us_separator][vc_column_text] This popular phrase, "Where the legislator does not provide, the taxpayer does not," has its genesis in the principle of legality and reserved law, which, from a normative perspective, means that taxes can only be set by law and acts as a true limit to the tax authority. And, from a practical application perspective, it means that the Administration must submit to the law in its actions. This goes beyond the merely tax-related: it is the submission of the administration to the law, characteristic of a state of law. The principle of reserved law in tax matters states that everything related to this matter must be regulated by law; it is reserved only to the legislative branch and by constitutional mandate. The principle of legality and the confidentiality of the law in tax matters is established in the National Constitution in Articles 109, 205 (section 35), and 351, and is expressly regulated in Article 11 of the current Tax Code, which provides that it is the exclusive jurisdiction of the National Congress through tax and customs laws and, consequently, cannot be subject to regulatory authority. Therefore, no official, regardless of their position, may apply a law that is contrary to the legal system, nor may they limit a positive rule through a Regulation that unfoundedly restricts the scope of the law, since the Regulation may not be contrary to the law or modify or restrict its content. This legal reservation guarantees the rights of taxpayers since such exercise will be legitimate and fair to the extent that its exercise is carried out in compliance with constitutional principles, which occurred with the Appeal of Unconstitutionality of Article 5 of Legislative Decree No. 113-2011, where in the aforementioned Decree the state became a creditor of the Taxpayer's Sales Tax tax credit (for a more general context, read the article "The unconstitutionality of Article 5 of Decree 113-2011 grants taxpayers the compensation of the Sales Tax with another type of tax") and the Constitutional Chamber ruled, determining that it is confiscatory because the provision results in a dispossession for the taxpayer, without compensation of any kind; since it collides with Article 109 of the Constitution of the Republic, giving rise to the unconstitutionality. Therefore, it is not enough for the legislator to create taxes or regulations that are justified solely by the fact that they are provided for by law. If the rule does not establish a valid reason, it would be arbitrary. The rule must establish a connection between the appropriation of funds and the legislator's proposed purpose. In conclusion, the reserve of law and the principle of legality in tax matters are fundamental for the protection of the rights of taxpayers and their legal security. For comprehensive advice on this matter, please contact the following email address: nfugon@lexincorp.com. *Legal Notice: The general information contained in this document is provided for informational purposes only and should not be construed as legal advice on any of the topics discussed. You should not act or refrain from acting on the basis of any content included in this document without seeking legal or professional advice. All liability for any actions you take or refrain from taking based on any content in this communication is disclaimed. [/vc_column_text][us_separator][vc_column_text] Written by: Lic. Nicole Fugon [/vc_column_text][/vc_column][/vc_row]
