Provisional Measure Setting Forth an Agreement Procedure Between the Federal Tax Authority and the Taxpayer Published By The Official Gazette

It was published today, October 17, 2019, the so-called “Provisional Measure of Legal Taxpayers”, which sets forth the conditions for the Federal Treasury and the taxpayers with tax debts undertaking agreements to resolve the litigation.
The Provisional Measure regulates the rule set forth in Article 171 of the Nacional Tax Code, which refers to the possibility of undertaking agreements to resolve litigation, and consequently, the extinction of tax credit, as a similar proceeding of the Offer in Compromise institute practiced by Internal Revenue Services from the United States of America.
According to such Provisional Measure, the Federal Treasury shall celebrate the agreements only when it attends to public interests.
The text is especially applicable to the federal taxes administrated by the General Federal Attorney Office (PGFN), and the agreement shall take place in the following cases:
(i) by individual proposing or by general submission, for debts posted in the Federal Debt Roster; or
(ii) by general submission, in other cases of litigation in the Administrative or in the Judicial level.
Regarding the agreement related to the item (i), it can be proposed by both the PGFN and the taxpayers and it is focused in tax credits rated as unrecoverable or of difficult recovery, being negotiable the in following conditions:
– Discounts of 50% by of the total amount or in up to 70% in the case of individuals and small companies.
– Payment through 84 up to 100 installments, in case of individuals and small companies.
– Grant of the moratorium period.
For item (i), the discount is applicable only to interest, fines and legal charges, therefore it does not reach the principal amount, the criminal fines and tax frauds. In this case, the debtor must not have committed any fraudulent acts or unfair competition, must acknowledge the debt, and had not sold or encumbered assets or rights without prior notice to the tax authorities when required by law.
Although the agreement of item (i) may assist in settling debts of more than 1.5 million debtors, it does not suspend the enforceability of the credit, remaining possible, although, the conditional suspension of the lawsuit as established in the Civil Procedure Code.
Regarding the agreement of item (ii) which may end thousands of lawsuits – this agreement shall involve reciprocal concessions between the parties and mainly involve debtors whose debts are under discussion in the administrative or judicial levels.
For this agreement, the Federal Treasury will specify by public notice the requirements, the reductions, the concessions and the factual and judicial situations that may be subject to it.
This agreement might also reduce the litigation by providing discounts and payments in up to 84 months. In addition, it is important to highlight that this agreement cannot authorize the refund or offsetting of amounts already subject to payment.
We remain available to assist you and to provide any further clarification