The control of conventionality in VAT matters

The control of conventionality is a judicial control mechanism that implies the duty of every national judge to "carry out an examination of compatibility between the domestic provisions and acts that it has to apply in a specific case, with international treaties (...)". This has been recognized by the Council of State in multiple rulings of the Plenary Chamber and the Third Section, including the one dated October 24, 2016 (Caracol Televisión and RCN vs. Antv). This doctrine, which has its origin in the case "Almonacid Arellano and others Vs. Chile", although initially established to be applied by judges, has been extended to other public branches of the State making it mandatory for other public officials. This control is so obligatory that the Inter-American Court of Human Rights itself, in its judgment of September 26, 2006 (paragraph 123), indicated that "Compliance by State agents or officials with a law [or administrative provision] that violates the Convention produces international responsibility of the State (...)".

Now, this control of conventionality, together with the duty of public officials to inapply the norms of the legal system that are contrary to others of higher rank (exception of illegality) -although not usual in Colombia- is especially mandatory (by mandate of Articles 9 and 227 of the Political Constitution) when domestic provisions contradict those of the Andean Community of Nations -CAN-.

In this sense, Article 4 of the Treaty of the Cartagena Agreement (modified by the Cochabamba Protocol) established that "the member countries are obliged to adopt such measures as may be necessary to ensure compliance with the rules that make up the legal system of the Andean Community" and "undertake, likewise, not to adopt or use any measure that is contrary to such rules or that in any way hinders their application".

Regarding VAT, Decision 599 of 2004 is currently in force in Colombia, which regulates the substantial aspects and procedures of value added taxes to be harmonized in the regimes of the Member Countries. Although initially the Commission of the Andean Community (as indicated in article 40 of the aforementioned Decision) wanted to submit the approval of such Decision to the internal bodies of each country, Decision 635 of July 19, 2006, repealed such stipulation indicating that the effectiveness of Decision 599 would begin as from January 1, 2008. This procedure took into account the thesis established by the Court of Justice of the European Union, which establishes that harmonization decisions or directives do not need to be adopted by the internal bodies of each country but by rules of secondary law.

The fact that Decision 599 of 2004 has not automatically modified the Tax Statute (since this would require a domestic law) does not imply that such Decision does not automatically create rights for the taxpayer, and that such rights prevail (because they are enshrined in a higher-ranking rule) over those of the domestic law.

In this sense, regarding the obligation to inapply local rules that are contrary to supranational provisions, the General Secretariat of the Andean Community, in its informative document SG/di 903 of September 24, 2008, has indicated that " (...) taxpayers who feel affected by the negligence in harmonization, may resort to the Andean Court of Justice or to the national courts to request the application of the Decision to their specific case or the suspension of a domestic rule contrary to the Community rule".

In this sense, the issuance of domestic law rules that contravene supranational rules that the State must respect, is prohibited for contravening its own acts. And, under the guiding principles of international law, this can be reversed or suspended by the corresponding Community Court under the doctrine of "estoppel”.